Uneingeschränkter Zugang

Stock price reaction to an arrangement approval in restructuring proceedings – the case of Poland

Błażej Prusak
Błażej Prusak
 und 
Marcin Potrykus
Marcin Potrykus
   | 30. Sept. 2022
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Article Category: Empirical Paper
Online veröffentlicht: 30. Sept. 2022
Seitenbereich: 279 - 298
Eingereicht: 14. Apr. 2022
Akzeptiert: 27. Juli 2022
DOI: https://doi.org/10.2478/ijme-2022-0014
Schlüsselwörter
© 2022 Błażej Prusak et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Figure 1

Types of restructuring proceedings in Polish law.Source: Own elaboration.
Types of restructuring proceedings in Polish law.Source: Own elaboration.

Figure 2

Stages of successful composition proceedings.Source: Own elaboration.
Stages of successful composition proceedings.Source: Own elaboration.

Figure 3

Graphic representation of the conducted event analysis.Source: Own elaboration.
Graphic representation of the conducted event analysis.Source: Own elaboration.

Figure 4

AAR rates during the event window.Source: Own elaboration. AAR, average abnormal return.
AAR rates during the event window.Source: Own elaboration. AAR, average abnormal return.

Results from testing the hypothesis

Hypotheses Based on AAR(0) result Based on CAAR result
H1P: Public disclosure of an arrangement conclusion in restructuring proceedings results in above-average stock return rates (Event No. 1). Confirmation of H1P. We observe positive and statistically significant (a = 0.05) abnormal rate of return on the event day. There is no basis for considering the H1P hypothesis valid due to not observing any (positive or negative) statistically significant abnormal rates of return for ALL sample. The CAAR value is negative, but not statistically significant.
H2P: Public disclosure of the court approval of an arrangement in restructuring proceedings results in above-average stock return rates (Event No. 2). There is no basis for considering the H2P hypothesis valid due to not observing any (positive or negative) statistically significant abnormal rates of return for ALL sample. There is no basis for considering the H2P hypothesis valid due to not observing any (positive or negative) statistically significant abnormal rates of return for ALL sample. The CAAR value is negative, but not statistically significant.
H3P: Public disclosure of an arrangement approval in restructuring proceedings becoming final results in above-average stock return rates (Event No. 3). Confirmation of H3P. We observe positive and statistically significant (a = 0.01) abnormal rate of return on the event day. Confirmation of H3P. We observe positive and statistically significant (a = 0.01) abnormal rate of return on the event window.

Descriptive statistics for the number of days from the public disclosure of information about the studied events

No. Descriptive statistics Situation 1 Situation 2 Situation 3
1 Arithmetic mean 41.3 132.2 90.9
2 Median 23.0 100.5 76.0
3 Mode 14.0 56.0 41.0
4 Standard deviation 47.4 90.2 61.6
5 Kurtosis 7.9 0.3 0.4
6 Skewness 2.8 1.1 1.0
7 Range 198.0 319.0 238.0
8 Minimum 12.0 27.0 13.0
9 Maximum 210.0 346.0 251.0

j.ijme-2022-0014.apptab.001

No. Company name Creditors’ approval of the arrangement (Event No. 1) Court approval of the arrangement (Event No. 2) Court validation of the arrangement (Event No. 3) Start of the estimation window End of the estimation window
1 ACTION January 10, 2020 August 7, 2020 December 17, 2020 August 6, 2019 January 2, 2020
2 AEDES February 23, 2017 April 19, 2017 September 26, 2016 February 16, 2017
3 ALUMAST June 22, 2011 July 5, 2011 July 26, 2011 January 24, 2011 June 15, 2011
4 ATONHT February 28, 2020 September 14, 2020 February 8, 2021 September 25, 2019 February 21, 2020
5 BIOMEDLUB June 13, 2016 July 12, 2016 September 30, 2016 January 13, 2016 June 6, 2016
6 BUMECH July 12, 2018 September 19, 2018 March 18, 2019 February 9, 2018 July 5, 2018
7 DREWEX October 7, 2014 October 28, 2014 January 12, 2015 May 12, 2014 September 30, 2014
8 DUDA July 27, 2009 September 15, 2009 September 28, 2009 February 25, 2009 July 20, 2009
9 ELEKTROEX December 5, 2005 December 21, 2005 August 1, 2006 July 7, 2005 November 28, 2005
10 IDEON August 8, 2013 September 4, 2013 October 15, 2013 March 7, 2013 August 1, 2013
11 IDMSA September 24, 2019 October 17, 2019 April 6, 2020 April 25, 2019 September 17, 2019
12 IMAGIS January 19, 2017 March 28, 2017 June 14, 2017 August 22, 2016 January 12, 2017
13 INTAKUS June 3, 2013 June 21, 2013 August 21, 2013 December 27, 2012 May 24, 2013
14 INTERBUD October 2, 2019 November 14, 2019 February 21, 2020 May 7, 2019 September 25, 2019
15 INVICO June 24, 2016 July 14, 2016 October 13, 2016 January 26, 2016 June 17, 2016
16 MARKA June 13, 2017 July 18, 2017 September 26, 2017 January 12, 2017 June 6, 2017
17 MIRACULUM May 23, 2011 June 6, 2011 July 18, 2011 December 21, 2010 May 16, 2011
18 MONNARI September 30, 2010 October 22, 2010 November 9, 2010 May 6, 2010 September 23, 2010
19 ODLEWNIE May 4, 2010 May 18, 2010 May 31, 2010 December 1, 2009 April 26, 2010
20 PBG August 25, 2015 October 9, 2015 June 16, 2016 March 26, 2015 August 18, 2015
21 RAFAKO December 11, 2020 January 13, 2021 June 29, 2021 July 17, 2020 December 4, 2020
22 REGNON December 2, 2011 December 14, 2011 February 20, 2012 July 6, 2011 November 25, 2011
23 REGNON May 25, 2018 June 7, 2018 August 3, 2018 December 20, 2017 May 18, 2018
24 RUCHCHORZ December 1, 2017 December 14, 2017 April 9, 2018 July 6, 2017 November 24, 2017
25 SATIS December 3, 2019 March 10, 2020 August 3, 2020 July 5, 2019 November 26, 2019
26 SFINKS February 11, 2021 March 10, 2021 September 10, 2020 February 4, 2021
27 TXM May 25, 2020 June 17, 2020 August 31, 2020 December 18, 2019 May 18, 2020
28 VISTAL July 11, 2019 July 25, 2019 September 4, 2019 February 8, 2019 July 4, 2019
29 VIVID September 16, 2020 November 5, 2020 December 23, 2020 April 21, 2020 September 9, 2020
30 WILBO October 29, 2014 November 12, 2014 January 27, 2015 June 3, 2014 October 22, 2014
31 WORKSERV December 28, 2020 January 12, 2021 February 22, 2021 July 30, 2020 December 17, 2020
32 ZREMB November 15, 2018 December 5, 2018 February 26, 2019 July 19, 2018 November 7, 2018
33 BUDOPOL December 19, 2015 February 11, 2016 May 25, 2016 For these companies, a lack of price changes within the adopted estimation window was observed, and thus they were excluded from the research sample.
34 ESTAR March 25, 2013
35 GETBACK January 25, 2019 June 6, 2019 February 26, 2020
36 UNIFIED February 21, 2020 May 14, 2020
37 VERTE November 15, 2017 January 19, 2018

Event analysis results, including AAR values

Event No. Grouping variable/test statistics AAR (−1) AAR (0) AAR (1) AAR (2) AAR (3) AAR (4)
1 ALL (N = 32) AAR −2.4% 2.0% 2.5% −0.4% −2.2% −2.9%
Adjusted Patell Z −2.066 1.991 1.680 −1.894 −2.311 −0.992
Adjusted Patell Z p-value 0.039** 0.047** 0.093* 0.058* 0.021** 0.321
IN (N = 24) AAR −2.2% 2.0% 4.5% 0.2% −1.4% −3.3%
Adjusted Patell Z −1.515 1.670 2.768 −1.615 −1.535 −0.772
Adjusted Patell Z p-value 0.130 0.095* 0.006*** 0.106 0.125 0.440
OUTSIDE (N = 8) AAR −3.0% 1.9% −3.5% −2.2% −4.6% −1.7%
Adjusted Patell Z −1.513 1.094 −1.438 −0.994 −1.970 −0.649
Adjusted Patell Z p-value 0.130 0.274 0.151 0.320 0.049** 0.516
2 ALL (N = 32) AAR −0.6% 0.3% −3.6% 1.5% 0.1% −1.9%
Adjusted Patell Z −0.575 0.815 −1.168 0.411 −0.307 −1.089
Adjusted Patell Z p-value 0.566 0.415 0.243 0.681 0.759 0.276
IN (N = 27) AAR −0.7% 0.5% −4.1% 2.4% 0.1% −1.9%
Adjusted Patell Z −0.504 1.027 −1.077 0.777 −0.342 −1.145
Adjusted Patell Z p-value 0.614 0.305 0.282 0.437 0.732 0.252
OUTSIDE (N = 5) AAR −0.2% −0.6% −1.2% −3.1% 0.5% −1.8%
Adjusted Patell Z −0.274 −0.315 −0.441 −0.743 0.018 −0.091
Adjusted Patell Z p-value 0.784 0.753 0.659 0.457 0.986 0.928
3 ALL (N = 30) AAR 0.8% 5.2% −0.6% 2.9% −2.7% 3.8%
Adjusted Patell Z 1.209 2.861 1.272 0.882 −1.553 2.290
Adjusted Patell Z p-value 0.227 0.004*** 0.203 0.378 0.120 0.022**
IN (N = 17) AAR −0.8% 9.6% −3.0% 2.8% −3.0% 4.5%
Adjusted Patell Z 0.247 3.905 −0.226 −0.247 −0.054 0.428
Adjusted Patell Z p–value 0.805 0.000*** 0.821 0.805 0.957 0.669
OUTSIDE (N = 13) AAR 2.8% −0.5% 2.6% 3.1% −2.2% 2.9%
Adjusted Patell Z 1.552 −0.173 2.195 1.628 −2.299 2.986
Adjusted Patell Z p–value 0.121 0.863 0.028** 0.104 0.022** 0.003***

Number of observations by three study groups

Arrangements concluded (Event No. 1) Arrangements approved by a court (Event No. 2) Arrangements becoming final (Event No. 3)
Population of the companies under study 37 36 32
Final study sample 32 32 30

Bankruptcies and restructurings in Poland in 2005–2021

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Bankruptcy (liquidation) proceedings (business activities) 793 576 377 348 572 538 616 711 703 701 650 530 537 558 574 507 373
Bankruptcy proceedings with the possibility to make an arrangement (in accordance with the Bankruptcy and Reorganisation Act of 28 February 2003) n/a n/a 70 63 119 117 107 166 180 122 91 26 - - - - -
Restructuring proceedings (in force under the Restructuring Act of 15 May 2015) - - - - - - - - - - - 204 348 417 445 380 562
Simplified restructuring proceedings (out of court, in force until November 30, 2021) - - - - - - - - - - - - - - - 356 1190

Event analysis results, including CAAR rates

Event No. Grouping variable CAAR value Pos:neg CAAR Adjusted Patell Z Adjusted Patell Z p-value Statistical significance
1 ALL (N = 32) −3.4% 11:21 −1.392 0.164
IN (N = 24) −0.2% 11:13 −0.426 0.670
OUTSIDE (N = 8) −13.0% 0:8 −2.005 0.045 **
2 ALL (N = 32) −4.2% 12:20 −0.742 0.458
IN (N = 27) −3.8% 11:16 −0.532 0.595
OUTSIDE (N = 5) −6.3% 1:4 −0.714 0.475
3 ALL 9.5% 19:11 2.681 0.007 ***
IN (N = 17) 10.1% 11:6 1.618 0.106
OUTSIDE (N = 13) 8.8% 8:5 2.403 0.016 **
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