Insolvency


Also found in: Dictionary, Thesaurus, Legal, Financial, Wikipedia.

Insolvency

 

the inability of an economic entity such as an enterprise, organization, or other juridical person to ensure paymeny of its fiscal obligations.

In the USSR, enterprises and economic organizations that fail to meet installments on bank loans or omit payments to the state budget and to their suppliers over a prolonged period are classified as insolvent. Insolvency is caused primarily by such shortcomings in economic operations as failure to fulfill production and financial plans or accumulation of excess production stocks. Inadequacies in material-technical supply to the enterprise can also be a cause of insolvency. Delays in receipt of earnings for products sold, unplanned receipt of production stocks, and transportation difficulties can also contribute to insolvency; these are temporary factors independent of the operation of the economic organization.

For capitalist companies, insolvency leads to bankruptcy and to the liquidation of the enterprise; the burden of the unemployment thus caused is ultimately borne by the working people. The socialist state intervenes vigorously in the operation of enterprises that are functioning poorly; while employing economic sanctions and bank audits, it also extends fiscal assistance in order to improve the work of the insolvent enterprise.

O. I. LAVRUSHIN

References in periodicals archive ?
The team at Hay & Kilner is led by Neil Harrold, who deals with a wide range of matters pertaining to insolvent and distressed businesses and provides advice to insolvency practitioners, directors and senior management alongside secured and unsecured creditors and investors.
The Insolvency Service said the number of personal insolvencies in the first quarter of 2018 was 6.8% higher than in the previous quarter and 8.5% higher than in the same quarter the previous year.
The Financial and Capital Market Commission (FCMC) on Thursday filed an application with the district court in Riga, asking to open PNB Banka's insolvency proceedings.
R3's monthly statistics for July, compiled using Bureau Van Dijk's Fame database, highlight that about two-infive businesses in the region - 41 per cent - are now in the elevated insolvency risk band, equivalent to around 120,000 companies.
The Insolvency and Bankruptcy Code 2016 provides for re-organisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
regulating the profession of insolvency administrators;
Neil Purslow, Co-Founder and Chief Investment Officer of Therium, said: "Stephen is one of the world's preeminent insolvency professionals and we are delighted that he has joined Therium to lead our global insolvency litigation funding practice, which is a strong area of focus for the firm.
He said: "The key causes of insolvencies seen by the insolvency profession are familiar.
Vasile Godinca-Herlea, CEO of CITR Romania & Cyprus, said: "We are ready to replicate in Cyprus the successful model developed in Romania and are committed to working towards the improvement of the Cypriot legal insolvency framework in order to help the local market mature, as we successfully did in Romania."
The Insolvency Service said the annual uplift in personal insolvencies was driven by an increase in IVAs.
This book analyzes the political and institutional development of personal insolvency law since 1979 in the US and Europe.