Bankruptcy risk

(redirected from Insolvency Risks)

Bankruptcy risk

The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Bankruptcy Risk

The risk that an individual or especially a company may be unable to service its debts. Bankruptcy risk is greater when the individual or firm has little or no cash flow, or when it manages its assets poorly. Banks assess bankruptcy risk when considering whether to make a loan. It is also called insolvency risk.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Assets funded through the vehicle are isolated from the bankruptcy or insolvency risks of the entities involved in the program.
Restaurants tend to have one of the highest insolvency risks of the sectors tracked.
Allan Kelly, chair of R3 in the North East and a restructuring partner with Baker Tilly North East, said: "We're seeing continuing falls in regional insolvency risks that indicate a slow, but steady improvement for many of our industries, and it's good to see many of them holding their own against their peers from across the UK, if not outperforming them.
The transport and haulage sector in the North East also fared well, recording the lowest rate of insolvency risks in any of the UK's 12 regions for the sixth consecutive month.
As the industry works to detect destructive devices that have thus far managed to dodge the financial system's antiquated radar, every credit manager stands at risk of getting "tripped up." To escape the fall, financial experts have to uncover insolvency risks and issue early warnings to signal elevated default threats.
Following which, the solicitor can advise the lender of any insolvency risks of lending money.
Our results indicate that the managerial decision to purchase property insurance is positively related to company size and insolvency risks. By contrast, the amount of property insurance purchased is positively related to systematic risks but negatively related to insolvency and unsystematic risks and company size.
An additional $2 billion was spent by European companies purchasing "domestic" credit insurance coverage against insolvency risks in trading in their own country--a product which is not usually purchased by most companies trading outside Europe.
Assets funded through the vehicles are isolated from the bankruptcy or insolvency risks of the entities involved in the program.
Legal Structure and Support Contracts: ABCP conduits are structured to isolate the assets funded through the vehicle from the bankruptcy or insolvency risks of the entities involved in the transaction (asset sellers and/or originators and the sponsoring entity, among others).