Abstract:

abstract:Reorganization bankruptcy refers to a corporate rehabilitation mechanism permitting debtors to restructure operations while maintaining business continuity. This study develops a triple-threshold regulatory framework to simulate financial distress pathways in institutions mirroring real-world reorganization bankruptcy proceedings. Departing from traditional solvency assessments using a single zero-boundary criterion (where bankruptcy occurs upon falling below a single zero-value threshold), we propose a tripartite classification of financial health: solvency adequacy, insolvent or capital deficiency, and compulsory liquidation. The model's theoretical novelty lies in capturing strategic operational adjustments during capital deficiency phases to achieve regulatory compliance within "corrective grace period", with failure triggering orderly liquidation protocols. Through advanced analytical methodology involving joint Laplace transforms of liquidation timing and accumulated length of the capital deficiency durations, this research elucidates critical interdependencies between organizational capital architecture and the operational viability of reorganization-bankruptcy-style restructuring mechanisms observed in practice.

finance; reorganization bankruptcy; accumulated length of insolvency periods.