Jonatan Schytzer receives funding for research on Corporate Restructuring.
Senior Lecturer in Private Law, Jonatan Schytzer has together with Olof Wadell (PhD, Department of Business Studies) been awarded 2,000,000 SEK from the Jan Wallander and Tom Hedelius Foundation, as well as the Tore Browaldh Foundation for their project "Corporate Restructuring: Towards an Enhanced Viability Test."
Short project description
That some companies encounter financial problems is inevitable in a market economy. In recent decades, it has become increasingly common for states to provide companies with financial difficulties with a legal procedure called restructuring. The restructuring aims to create conditions for companies (businesses) to continue operating and thus avoid significant losses in bankruptcy. Such a restructuring procedure was introduced in Sweden in 1996. In just 2020, 307 companies were restructured in Sweden, employing a total of 9,200 individuals. However, historically, as many as every other restructuring has failed. It costs a lot of money for all involved parties, such as creditors, suppliers, and the government. For example, Saab Automobile's debts increased by a staggering 10 billion Swedish kronor from the start of its first reconstruction in 2009 until it was finally declared bankrupt in 2011.
Traditionally, corporate restructuring has been approached from a legal perspective. This also applies to the initial test of which companies are worth admitting to restructuring—the so-called viability test. From a legal perspective, the company is seen as an individual, independent economic entity; the company's value lies in what it owns or controls itself. However, research in business economics has shown that companies often develop long-lasting business relationships with key customers and suppliers, which are crucial for a company's survival. Therefore, this perspective highlights that the value of a company and its ability to survive during and after a reconstruction also resides in its business relationships. A company's business relationships should also be considered in the viability test.
The purpose of the project is to further develop the viability test with the aim of generating new knowledge that enables fewer failures in corporate reconstructions.
Lasse Blom
About the foundations
The purpose of the Jan Wallander and Tom Hedelius Foundation and the Tore Browaldh Foundation is to support social science research, primarily in business administration, economics and economic history.