Business+Failure

=Business Failure=

Local bookstores rebel against failed group (RED group: Angus & Robertson, Borders)
http://www.canberratimes.com.au/news/local/news/general/local-bookstores-rebel-against-failed-group/2124498.aspx

Insolvency

 * Insolvency** is a state in which a business is unable to pay its debts. A business with insufficient cash to meet its day-to-day commitments is **insolvent**.

If a business is unable to extract itself from insolvency there are a number of options available:
 * 1) Informal arrangement -- the company might contact creditors and agree on a manner to discharge the debt.
 * 2) Liquidation (selling assets for the required cash) -- may be **voluntary** (initiated by management) or **compulsory** (ordered by creditors or a court)
 * 3) Administration -- an order by a court to suspend payment of debts for a time. An administrator is appointed to manage the affairs of the company, with a view to discharging the debt or reaching an agreement with creditors. This gives the company "breathing room" to solve its financial difficulties. Again, administration may be **voluntary** or **compulsory** / involuntary
 * 4) Receivership -- a **receiver** is appointed to settle the debts in any way possible. After this is done, what remains of the company is returned to the owners.

//Adapted from, with further details available at, BizEd's [|Insolvency and Bankruptcy] pages.//

Dissolution
A company may be dissolved **voluntarily** if agreed by partners or shareholders, for example if a partner is retiring, or if the original purpose of the partnership has been achieved. It may be dissolved **involuntarily** if a court order is obtained, usually by creditors.

Bankruptcy
A legal state protecting a debtor from endless demands from their creditors. Bankruptcy is a process by which a debtor's assets are taken and applied to outstanding debts; after the process is over, the bankrupt has no further financial responsibility to the creditor. However certain very strict conditions apply to the bankrupt individual; for example, they are excluded from running a company for a number of years.

Bankruptcy may be **voluntary** (the debtor seeks protection from their debts) or **involuntary** (creditors obtain a court order forcing the debtor's bankruptcy). Involuntary bankruptcy is unusual, because there is usually little financial benefit to the creditor -- who often pay their own legal bills if the debtor is successfully bankrupted.

//Adapted from [|Bankruptcy in Australia on MyFinanceReporter.com]//

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Reasons for business failure
Class handout "Why businesses fail" -- adapted with thanks from Shaun Haidon's AbleLTC wiki site.

[|BizEd -- Business Survival] is a problem based learning (PBL) resource for investigating the reasons for business failure.
 * 1) Read and take notes from the 3 pages beginning with [|BizEd -- Business Survival]
 * 2) Read the case study -- [|Helping individuals and companies that are in financial difficulties] from //The Times 100.// When you reach Page 5 of the article, find out what relevant insolvency services are available to a business operating in the A.C.T. from the ACT's [|Office of Regulatory Services] website.
 * 3) Identify 3 articles from the [|Resources]page and take notes on issues relevant to business survival and insolvency.

The Business Life Cycle

 * 1) Complete the [|Portakabin] and [|Kellogg's]case studies.
 * 2) Describe 3 ways in which a company in the "Decline" phase might renew itself.

Brand Depot and DFO
Canberra Times coverage of the closure of [|Brand Depot], a discount bulk goods retail outlet owned by the airport management company, Capital Airport Group Pty Limited. Stephen Byron, managing director of Canberra Airport, has cited a failure of the bulk goods outlet business model. [|Brand Depot to close as war ends] [|Fears DFO could be next victim] [|Future of DFO rests on court decision]

Book Retailers
RED Group, the owners of Angus & Robertson and Borders book retail chains, is in receivership. [|Borders store closures likely] [|Internet blamed as booksellers enter receivership]