Bankruptcy is used as a synonym for bankruptcy.
Breakage is the breakage of a surface of a certain rigidity or hardness. This is the first definition of the term presented by the dictionary of the Royal Spanish Academy (RAE) . By extension, a crack or fissure in the earth is known as a break.
For example: "I didn't see the break in the ground and, when I passed by with the car, I punctured a tire" , "The break of the panel occurred with the fourth or fifth hit; Only then was the explosion heard .
Bankruptcy at the commercial level
The concept, however, is much more common at a commercial level to name the action and effect of bankrupting a merchant . Bankruptcy, also known as bankruptcy , occurs when a person or organization is unable to meet the payments they must make.
This means that if a company has to pay a debt and does not have the money to do so, it can declare bankruptcy. This is a legal situation that involves various obligations and responsibilities. In other words, bankruptcy occurs when the liabilities payable to an entity exceed its assets (available economic resources) .
Declaring bankruptcy has several effects. In principle, the person (natural or legal) is disqualified from managing their assets . Said administration is in the hands of a third party known as a trustee.
Bankruptcy, on the other hand, establishes the rights of creditors (who cannot demand improvements in the situation after the bankruptcy declaration) and brings together all pending lawsuits against the debtor before the same judge.
A bankruptcy occurs when there are no resources to meet payment obligations.
Some examples
Let's see below how some of the most important companies in the world have gone bankrupt or failed outright in recent decades:
enron
At the time, it became one of the largest natural gas companies , in the electricity sector, in paper production and in communication, worldwide. It had a staff of more than 22 thousand people. But after it was proven that his success was due, in part, to the manipulation of truth and resources, he declared bankruptcy towards the end of 2001.
Arthur Andersen
It was thanks to the prestige of Arthur Andersen , founder of the Enron company, that he was able to hide a fraud of colossal dimensions for years. But once his lies were exposed, Andersen 's company soon fell, as the market stopped trusting any brand associated with his name. At the end of 2002, after having lost the respect of his followers and all his capital, he declared bankruptcy.
Swissair
It was a Swiss airline founded in the 1930s, which had a long life until it chose the wrong strategy. In the early 1990s, it leaned toward alliances with other companies, but instead of consciously investing to expand its horizons through major collaborations, it focused on buying small airlines. This led to a deep economic crisis that, together with the shock wave of the 2001 attacks in the United States and the prices of the competition , led to bankruptcy in 2002.
Parmalat
In the early 1960s, Parmalat was nothing more than a discreet pasteurization plant. However, a series of successful investments turned it into a large multinational. The success of this company was based on the same decision that put it at risk and, finally, led it to a failure from which it would not recover: the purchase of small companies, based on growing debt. When the situation became unsustainable, its founder was arrested for fraud and this marked a before and after for the dairy products giant.