Investigating the direct costs of business rescue

Abstract

A vital aspect of any formal turnaround procedure is the costs it imposes on an already financially distressed firm. For the commencement decision, it becomes a vital variable that stakeholders must consider. Whilst proceedings will inevitably generate costs, these costs are most likely to vary between jurisdictions. Our understanding of reorganisation costs, both direct and indirect, is of paramount importance to decision-makers (Armour, Hsu & Walters 2012:109). Our study takes a closer look at the direct costs of the business rescue process to better understand them and their impact on a distressed firm.