Abstract

The recognition of debts discharge at the end of a bankruptcy procedure in favor of a legal entity (and not only in favor of a natural person) is an innovation of our legal system intended to facilitate a fresh start of the legal entity. In this work we provide empirical evidence to evaluate the effectiveness of this public policy, analyzing the economic activity of more than 600 companies once the respective bankruptcy procedure is completed. The results show that only a minor subgroup of debtor companies presents some post-insolvency economic activity, but this activity is scarce and temporary, without being demonstrative of a real fresh start of the legal entity.

Keywords

Bankruptcy Law legal entity entrepreneurship liquidation discharge