Recovery rates of financial distressed firms: Empirical evidence of listed companies in the stock market of Thailand.

Abstract

Financial distress is recognized as a situation where a firm has difficulty setting financial obligations to its creditors and may eventually lead to the probability of bankruptcy. In case of distressed public limited companies, the economic consequences would occur widely. The concept of “going concern” has therefore been implemented legitimately in Thailand to prevent such situation and the alternative way of “reorganization” has been introduced for a decade. In essence, the recovery rates of Thai businesses under the reorganization should be investigated together with the analysis on influencing factors upon the recovery rates for the purpose of being a guideline for businesses considering to enter into reorganization scheme. This empirical study applies the available data of the listed companies in the SET entering into the reorganization since the first stage of implementing reorganization law in B.E. 2541. Also, the relevant factors influencing the recovery rate shall be investigated either the firm specific factors or the macroeconomic factors.

KEY WORDS: Recovery Rates / Reorganization