The Effect of Corporate Governance on Corporate Reorganization

• Main Authors: Yin Chi-Lung, 尹志龍
• Other Authors: Yin-Hua Yeh
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/25960678987885199465

碩士 === 輔仁大學 === 金融研究所 === 91 === Business enterprises from take place financial distress to go to corporate reorganization, then companies completed reorganization, companies these three stages whether governors deal fairly with the shareholders, creditors, employees...etc., not only the close business enterprises grow, but also affect the society to stabilize. This study tried to research the effect of corporate governance on corporate reorganization. There are many factors that cause financial distress, but the key factors that researchers often use are accounting information and macroeconomics. La Porta et al. (2000) and Johnson et al. (2000) pointed out that the controlling owner could extract wealth from the firm and minority shareholders, receive the entire benefit. They will worsen companies finance results and cause financial distress. Lee and Yeh (2003) pointed out that the poor corporate governance could increase the probability of financial distress in Taiwan. During the period of corporate reorganization, reorganizers who establish the reorganization plan and auditors who has profession and independence affect the creditors and stakeholders’ viewpoint. If reorganizers could deal fairly with stakeholders’ rights, they will let reorganization plan to pay to carry out. Completing the corporate reorganization, the company wants to maintain the operation, compensating liabilities, avoiding take place the financial distress again. This study used the analytic hierarchy process (AHP) interview the bank loaners and stakeholders. Which factors cause the financial distress ？ What is the important in the reorganization plan？ Then crosses the analysis Tong Lung Metal Industry Co., Ltc, Kuei Yi industry and Victor Taichung Machinery Works Co., Ltc., the experts think that the poor corporate governance is the most important factor in finance distress. Immediately after applied the corporate governance and rating system with Yeh et al. (2002), the three cases also find the rating of corporate governance equally worse. During the period of corporate reorganization, the usage AHP analysis creditors and stakeholders, to realize what strategies they think most important. The compensation is the most important to Tong Lung, Kuei Yi and Victor Taichung. Furthermore, the cases study of Tong Lung Metal Industry Co., Ltc find the rating of corporate governance also rise significantly. The corporate governance not only affect the probability of financial distress, but also influence reorganization plan and avoid take place the financial distress again.