Value. Bankruptcy. Investment Price Essay Example | Topics and Well Written Essays - 1000 words

Value. Bankruptcy. Investment Price - Essay Example On the other hand, the US system is supposed to be more debtor-friendly, where the courts play a significant role in the restructuring of the distressed company (Bourguignon & Pleskovic, 2007). In the US, bankruptcy is managed under the Bankruptcy Code, formed by the Bankruptcy Reform Act of 1978. Under this Act, a company could be restructured and reorganized or else liquidated. A financially distressed company can get protection from the creditors under the Chapter 11 of the Bankruptcy Code. The company can then attempt to rise above its financial hardships and also sort out the payments to its various creditors. Conversely, if the company files under Chapter 7 of the Bankruptcy Code, the assets of the company are liquidated and the proceeds are allocated to the creditors. The major trade-off in the bankruptcy act is between providing protection to a distressed company and ensuring bondholders with adequate security to extend credit. Providing protection to the financially distress ed company from its creditors and helping them to start afresh is an important driver of private enterprises. Many entrepreneurs would not take up the risk of forming a business if they had a possibility of facing unrestricted liability. However, the partial liability cancellations and bailouts of the bankrupt companies hurt the interest of the bondholders because they receive only a fraction of the value actually owed. Many a times, the liquidation of the company’s assets also does not help the creditors to acquire the total amount they owed to the company. This consequently makes the creditors more risk averse and the restructured company finds it difficult to locate investment post its bankruptcy. Therefore, regardless of liquidation, reconciliation of liability claims or Chapter 11, the lenders do not get back what they originally owed to the company (Damodaran, 2005). Answer 2 A company is said to be bankrupt when it is not capable of fulfilling its contractual liabiliti es. The assets of such a company are generally liquidated and the earnings from the liquidation process are utilized to meet the overdue claims. The cost involved in the process of going bankrupt is obscure and hence difficult to quantify. The legal expenditures involved are known as the direct cost of bankruptcy. These costs occur in the form of cash outflows at the moment of bankruptcy of the company. Therefore, the direct costs of bankruptcy consist of legal as well as administrative expenditures and also the interest payments for the payment of the overdue cash flows. However, the major part of the bankruptcy cost takes place prior to the company’s bankruptcy declaration. The direct costs of bankruptcy of large companies are considerably small considered to their indirect costs of bankruptcy. When the suppliers, the buyers, the consumers and also the

Arab News Essay Example | Topics and Well Written Essays - 1500 words

Arab News - Essay Example "Traditional rule in the emirates generally has been patriarchal, with political allegiance defined in terms of loyalty to the tribal leaders. Political leaders in the emirates are not elected, but citizens may express their concerns directly to their leaders via traditional mechanisms, such as the open majlis, or council" (Country Reports on Human Rights Practices, 2001).According to the Constitution, Federal Supreme Council consists of the seven emirate leaders, which means, all regions have approximately equal access to legislative process. The Council elects President and Vice President directly among its members, and President is entitled to select Cabinet and Prime Minister. In spite of the well-known fact that emirate leaders normally meet in informal settings, the Constitution obliges them to assemble annually and determine legislation, country budget and further social policy. The Cabinet controls and manages the Federation on a daily basis, and the Federal National Council, the major advisory body, constitute a link between the Council and the Cabinet, as FNC officials are expected to provide consulting services to emirate leaders and make queries to the Cabinet, even though FNC has no legislative rights. Every region maintains control over its oil and mineral resources, local economic issues, inter-emirate trade and some aspects of local and regional security. The central Government declares dominance in terms of international affairs, defense strategies, and progressively more in terms of law and the provision of certain government services to population (bbc.co.uk, 2006). Judicial branch in UAE is mostly independent, but the court system is subordinated and in some sense managed by the federal Government, in particular, international cases and all events and crimes, associated with terrorism. Policing in United Arab Emirates is comparatively independent, since each region has its own internal police force, but they all are accountable to hierarchically vertically higher structures. The federation supports the establishment of free commerce and has market economy, basically maintained by oil and natural gas trade as well as light industry, like textiles and garments manufacturing. Abu Dhabi, the largest emirate is economic and political center, as the majority of petrol production businesses are situated in this region. The Emirate of Dubai is likewise an oil producer, as well as a growing financial and commercial center in the Gulf. "The remaining five emirates have negligible petroleum or other resources and therefore depend in varying degrees on federal government subsidies, particularly for basic services such as health care, electricity, water, and education. The economy provides citizens with a high per capita income, but it is heavily dependent on foreign workers, who constitute at least 80 percent of the general population" (Country Reports on Human Rights Practices, 2001). Human rights in UAE are respected, but in fact not realized completely. For instance, there are some biases at governmental level, which support patriarchate and male domination, and correspondingly, there are almost no business or educational newspapers, intended for women. Furthermore, the Government rejects the citizens' right to change or elect authorities, and the press and television still omit or avoid direct criticism of authorities, as the most popular and available newspapers are government-oriented