Bankruptcy approaches and restructuring systems With an emphasis on financial markets

Fateme sahraei¹ Jafar jamali² Hamidreza vakilifard³ Ali zare⁴ Seyed Yaghoub zeraatkish⁵

1) Ph.D of finance, Department of Financial Management, Faculty of Management and Economics, Sciences and Research Branch, Islamic Azad University, Tehran, Iran.
2) Assistant Professor, Department of Financial Management, Faculty of Management and Economics, Sciences and Research Branch, Islamic Azad University, Tehran, Iran. (Corresponding Author).
3) Associate Professor, Department of Accounting, Faculty of Management and Economics, Sciences and Research Branch, Islamic Azad University, Tehran, Iran.
4) Assistant Professor, Department of law, Faculty of Theology and Political Sciences, Sciences and Research Branch, Islamic Azad University, Tehran, Iran.
5) Associate Professor, Department of Agricultural Economic, Faculty of Agricultural Sciences and Food Engineering, Sciences and Research Branch, Islamic Azad University, Tehran, Iran.(

IOI Code : XKDB-KGKZA
Publication : 4th International Conference on Advanced Research in Management And Humanities(huconf.com/4th)
Abstract :
    The bankruptcy regime for legal entities plays a vital role in the financial markets and economic activities, impacting the development and transparency of the financial sector. However, existing bankruptcy laws and regulations often fall short in addressing the needs of suspended and bankrupt companies, resulting in theoretical and regulatory flaws. This article highlights the necessity for transforming and modernizing the bankruptcy system to promote economic transparency and resilience. The bankruptcy system for legal entities should guarantee transparency, fair distribution of losses, protection of investors, and the credibility of financial markets. In advanced economies, the focus has shifted from mere liquidation to preserving and revitalizing struggling companies through restructuring and addressing underlying issues. However, the current bankruptcy system in Iran, particularly concerning joint-stock companies, primarily emphasizes liquidation and asset distribution. To bridge this gap, it is crucial for the Iranian legislator to adopt a fundamental change of attitude and revise bankruptcy regulations. The survival, revival, and vitality of distressed economic enterprises should be prioritized, reflecting international best practices. By embracing restructuring models and approaches, the bankruptcy regime can contribute to the preservation of companies, ensuring their continued operations and mitigating losses. This article argues that the transformation and modernization of the bankruptcy a regime for legal entities are essential for the development of financial markets, economic transparency, and the protection of stakeholders. By revisiting the existing bankruptcy regulations and aligning them with international standards, Iran can create an environment that fosters economic revitalization and safeguards the interests of all parties involved.

Keywords : bankruptcy regime legal entities economic revitalization restructuring transparency stakeholder protection