The Financial Rehabilitation of the Nterprise as a Path Prevent Bankruptcy in the Context of War

Abstract

The issue of insolvency among enterprises in Ukraine is particularly pertinent in times of economic crisis. The extensive armed occupation by the Russian Federation has caused economic losses for all citizens and businesses in Ukraine, with some companies exhibiting signs of bankruptcy. For businesses, the war has complicated or rendered ineffective operations, timely settlements with suppliers, and the fulfillment of obligations in full. Additionally, Ukraine is currently in the process of gradual integration into the European community with specially defined rules and conditions for market functioning, which may lead to a decrease in financial stability for local businesses. The essence of the concept of " financial rehabilitation" is explored in the article, and the roles and significance of financial rehabilitation for enterprises with the aim of preventing their bankruptcy in times of martial law are determined. The advantages of pre-trial financial rehabilitation are highlighted, and the scales of application of the financial rehabilitation procedure for a chosen period in Ukraine are examined. It is argued that in times of martial law, particular attention is deservedly paid to external factors that may lead to business bankruptcy. This is associated with the transition of the domestic economy to a wartime footing, migration, and mobilization of the able-bodied population, which affect demand and supply for goods, jobs, and services in Ukraine. The advantages of applying financial rehabilitation to restore the solvency of modern enterprises are identified, with pre-trial financial rehabilitation being an effective means of protecting the rights of the debtor and having several advantages over bankruptcy proceedings. It is determined that for successful financial rehabilitation, the company must convince debtors of the expediency of conducting financial rehabilitation. To appear convincing and prospective, the debtor must provide a liquidation and financial analysis of the troubled enterprise. The expediency of financial rehabilitation can be justified by the fact that enterprises possess sanative potential and have developed a convincing financial rehabilitation concept and corresponding remedial measures. Thus, the pre-trial financial rehabilitation procedure is a convenient and expeditious means of financial recovery for the debtor, enabling avoidance of bankruptcy proceedings initiation and minimization of risks associated with enterprise shutdown.