Criteria for Selecting Restructuring Strategies for Distressed or Declining Enterprises

This paper seeks to determine the criteria for choosing restructuring strategies for declining or distressed enterprises. First, the paper differentiates between different stages of decline and different levels of distress, of which bankruptcy is an application. Second, it reviews the different forms of restructuring appearing in the academic literature. Third, it formalizes a descriptive model of determining restructuring applicable to distressed and declining enterprises. Specifically, the selection of a restructuring strategy is influenced not only be general restructuring criteria (firm-specific factors, the environment and characteristics of different restructuring) but also by the dec…