dc.contributor.author |
De Abreu, Nicole Varela Aguiar
|
|
dc.contributor.author |
Rosslyn-Smith, Wesley John
|
|
dc.date.accessioned |
2022-06-10T09:56:01Z |
|
dc.date.available |
2022-06-10T09:56:01Z |
|
dc.date.issued |
2021-07-16 |
|
dc.description.abstract |
ORIENTATION : The direct costs associated with business rescue proceedings are essential to the
decision-making of directors, business rescue practitioners and other affected parties. Business
rescue has come under criticism for being a costly procedure, but what constitutes these costs
and how they are defined remain largely unknown.
RESEARCH PURPOSE : The aim of this study was to identify and measure the direct costs of business
rescue proceedings in South Africa. This research also explored the relationship between direct
costs and the following variables: firm size and duration of business rescue proceedings.
MOTIVATION FOR THE STUDY : Despite the significance of understanding reorganisation costs,
astonishingly little is know about the size and determinants of the direct costs of business
rescue in the South African context. Business rescue practitioners fees and other related
expenses have been blamed for worsening business rescue proceedings’ reputation. However,
researchers have not yet determined the nature or quantum of such costs.
RESEARCH DESIGN, APPROACH AND METHOD : This study employed an exploratory sequential
mixed-method research design. The first phase comprised semi-structured interviews
supplemented by a closed card sort with 14 business rescue practitioners. The first phase
resulted in direct cost categories and components used to develop a survey instrument. The
survey was administered in the second phase and measured the direct costs for 19 South
African firms previously under business rescue.
MAIN FINDINGS : The first phase results show that the direct costs of business rescue consist of
four categories: the basic remuneration of the business rescue practitioner, contingency fees,
professional fee disbursements and general disbursements. Because of the small sample size, the results of the second phase were inconclusive.
PRACTICAL/MANAGERIAL IMPLICATIONS : This research contributes to the management body of
knowledge by providing business rescue practitioners, the management of distressed companies,
and affected parties, especially creditors with a starting point into understanding the direct costs of
business rescue proceedings.
CONTRIBUTION/VALUE-ADD : This is the first study of its kind, to quantitatively measure the direct
costs of business rescue in the South African context. Therefore, the results of the study may offer
affected parties some insight and clarity regarding the nature of the direct costs of business rescue. |
en_US |
dc.description.department |
Business Management |
en_US |
dc.description.librarian |
am2022 |
en_US |
dc.description.uri |
http://www.actacommercii.co.za |
en_US |
dc.identifier.citation |
De Abreu, N.V.A. & Rosslyn-
Smith, W., 2021, ‘Investigating
the direct costs of business
rescue’, Acta Commercii
21(1), a903. https://DOI.org/10.4102/ac.v21i1.903. |
en_US |
dc.identifier.issn |
2413-1903 (print) |
|
dc.identifier.issn |
1684-1999 (online) |
|
dc.identifier.other |
10.4102/ac.v21i1.903 |
|
dc.identifier.uri |
https://repository.up.ac.za/handle/2263/85794 |
|
dc.language.iso |
en |
en_US |
dc.publisher |
AOSIS |
en_US |
dc.rights |
© 2021. The Authors.
Licensee: AOSIS. This work
is licensed under the
Creative Commons
Attribution License. |
en_US |
dc.subject |
Direct costs |
en_US |
dc.subject |
Business rescue |
en_US |
dc.subject |
Proceedings |
en_US |
dc.subject |
South Africa (SA) |
en_US |
dc.subject |
Firm size |
en_US |
dc.subject |
Duration of business rescue |
en_US |
dc.subject |
Financial distress |
en_US |
dc.subject |
Insolvency |
en_US |
dc.subject |
Reorganisation |
en_US |
dc.subject |
Reorganisation costs |
en_US |
dc.title |
Investigating the direct costs of business rescue |
en_US |
dc.type |
Article |
en_US |