Have a personal or library account? Click to login
Stock price reaction to an arrangement approval in restructuring proceedings – the case of Poland Cover

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

International Journal of Management and Economics
Volume 58 (2022): Issue 3 (September 2022)
By: Błażej Prusak and  Marcin Potrykus  
Open Access
|Sep 2022

Figures & Tables

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

HypothesesBased on AAR(0) resultBased 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 statisticsSituation 1Situation 2Situation 3
1Arithmetic mean41.3132.290.9
2Median23.0100.576.0
3Mode14.056.041.0
4Standard deviation47.490.261.6
5Kurtosis7.90.30.4
6Skewness2.81.11.0
7Range198.0319.0238.0
8Minimum12.027.013.0
9Maximum210.0346.0251.0

j_ijme-2022-0014_apptab_001

No.Company nameCreditors’ 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 windowEnd of the estimation window
1ACTIONJanuary 10, 2020August 7, 2020December 17, 2020August 6, 2019January 2, 2020
2AEDESFebruary 23, 2017April 19, 2017 September 26, 2016February 16, 2017
3ALUMASTJune 22, 2011July 5, 2011July 26, 2011January 24, 2011June 15, 2011
4ATONHTFebruary 28, 2020September 14, 2020February 8, 2021September 25, 2019February 21, 2020
5BIOMEDLUBJune 13, 2016July 12, 2016September 30, 2016January 13, 2016June 6, 2016
6BUMECHJuly 12, 2018September 19, 2018March 18, 2019February 9, 2018July 5, 2018
7DREWEXOctober 7, 2014October 28, 2014January 12, 2015May 12, 2014September 30, 2014
8DUDAJuly 27, 2009September 15, 2009September 28, 2009February 25, 2009July 20, 2009
9ELEKTROEXDecember 5, 2005December 21, 2005August 1, 2006July 7, 2005November 28, 2005
10IDEONAugust 8, 2013September 4, 2013October 15, 2013March 7, 2013August 1, 2013
11IDMSASeptember 24, 2019October 17, 2019April 6, 2020April 25, 2019September 17, 2019
12IMAGISJanuary 19, 2017March 28, 2017June 14, 2017August 22, 2016January 12, 2017
13INTAKUSJune 3, 2013June 21, 2013August 21, 2013December 27, 2012May 24, 2013
14INTERBUDOctober 2, 2019November 14, 2019February 21, 2020May 7, 2019September 25, 2019
15INVICOJune 24, 2016July 14, 2016October 13, 2016January 26, 2016June 17, 2016
16MARKAJune 13, 2017July 18, 2017September 26, 2017January 12, 2017June 6, 2017
17MIRACULUMMay 23, 2011June 6, 2011July 18, 2011December 21, 2010May 16, 2011
18MONNARISeptember 30, 2010October 22, 2010November 9, 2010May 6, 2010September 23, 2010
19ODLEWNIEMay 4, 2010May 18, 2010May 31, 2010December 1, 2009April 26, 2010
20PBGAugust 25, 2015October 9, 2015June 16, 2016March 26, 2015August 18, 2015
21RAFAKODecember 11, 2020January 13, 2021June 29, 2021July 17, 2020December 4, 2020
22REGNONDecember 2, 2011December 14, 2011February 20, 2012July 6, 2011November 25, 2011
23REGNONMay 25, 2018June 7, 2018August 3, 2018December 20, 2017May 18, 2018
24RUCHCHORZDecember 1, 2017December 14, 2017April 9, 2018July 6, 2017November 24, 2017
25SATISDecember 3, 2019March 10, 2020August 3, 2020July 5, 2019November 26, 2019
26SFINKSFebruary 11, 2021March 10, 2021 September 10, 2020February 4, 2021
27TXMMay 25, 2020June 17, 2020August 31, 2020December 18, 2019May 18, 2020
28VISTALJuly 11, 2019July 25, 2019September 4, 2019February 8, 2019July 4, 2019
29VIVIDSeptember 16, 2020November 5, 2020December 23, 2020April 21, 2020September 9, 2020
30WILBOOctober 29, 2014November 12, 2014January 27, 2015June 3, 2014October 22, 2014
31WORKSERVDecember 28, 2020January 12, 2021February 22, 2021July 30, 2020December 17, 2020
32ZREMBNovember 15, 2018December 5, 2018February 26, 2019July 19, 2018November 7, 2018
33BUDOPOLDecember 19, 2015February 11, 2016May 25, 2016For these companies, a lack of price changes within the adopted estimation window was observed, and thus they were excluded from the research sample.
34ESTARMarch 25, 2013
35GETBACKJanuary 25, 2019June 6, 2019February 26, 2020
36UNIFIEDFebruary 21, 2020May 14, 2020
37VERTENovember 15, 2017January 19, 2018

Event analysis results, including AAR values

Event No.Grouping variable/test statisticsAAR (−1)AAR (0)AAR (1)AAR (2)AAR (3)AAR (4)
1ALL (N = 32) AAR−2.4%2.0%2.5%−0.4%−2.2%−2.9%
Adjusted Patell Z−2.0661.9911.680−1.894−2.311−0.992
Adjusted Patell Z p-value0.039**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−1.5151.6702.768−1.615−1.535−0.772
Adjusted Patell Z p-value0.1300.095*0.006***0.1060.1250.440
OUTSIDE (N = 8) AAR−3.0%1.9%−3.5%−2.2%−4.6%−1.7%
Adjusted Patell Z−1.5131.094−1.438−0.994−1.970−0.649
Adjusted Patell Z p-value0.1300.2740.1510.3200.049**0.516
2ALL (N = 32) AAR−0.6%0.3%−3.6%1.5%0.1%−1.9%
Adjusted Patell Z−0.5750.815−1.1680.411−0.307−1.089
Adjusted Patell Z p-value0.5660.4150.2430.6810.7590.276
IN (N = 27) AAR−0.7%0.5%−4.1%2.4%0.1%−1.9%
Adjusted Patell Z−0.5041.027−1.0770.777−0.342−1.145
Adjusted Patell Z p-value0.6140.3050.2820.4370.7320.252
OUTSIDE (N = 5) AAR−0.2%−0.6%−1.2%−3.1%0.5%−1.8%
Adjusted Patell Z−0.274−0.315−0.441−0.7430.018−0.091
Adjusted Patell Z p-value0.7840.7530.6590.4570.9860.928
3ALL (N = 30) AAR0.8%5.2%−0.6%2.9%−2.7%3.8%
Adjusted Patell Z1.2092.8611.2720.882−1.5532.290
Adjusted Patell Z p-value0.2270.004***0.2030.3780.1200.022**
IN (N = 17) AAR−0.8%9.6%−3.0%2.8%−3.0%4.5%
Adjusted Patell Z0.2473.905−0.226−0.247−0.0540.428
Adjusted Patell Z p–value0.8050.000***0.8210.8050.9570.669
OUTSIDE (N = 13) AAR2.8%−0.5%2.6%3.1%−2.2%2.9%
Adjusted Patell Z1.552−0.1732.1951.628−2.2992.986
Adjusted Patell Z p–value0.1210.8630.028**0.1040.022**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 study373632
Final study sample323230

Bankruptcies and restructurings in Poland in 2005–2021

20052006200720082009201020112012201320142015201620172018201920202021
Bankruptcy (liquidation) proceedings (business activities)793576377348572538616711703701650530537558574507373
Bankruptcy proceedings with the possibility to make an arrangement (in accordance with the Bankruptcy and Reorganisation Act of 28 February 2003)n/an/a70631191171071661801229126-----
Restructuring proceedings (in force under the Restructuring Act of 15 May 2015)-----------204348417445380562
Simplified restructuring proceedings (out of court, in force until November 30, 2021)---------------3561190

Event analysis results, including CAAR rates

Event No.Grouping variableCAAR valuePos:neg CAARAdjusted Patell ZAdjusted Patell Z p-valueStatistical significance
1ALL (N = 32)−3.4%11:21−1.3920.164
IN (N = 24)−0.2%11:13−0.4260.670
OUTSIDE (N = 8)−13.0%0:8−2.0050.045**
2ALL (N = 32)−4.2%12:20−0.7420.458
IN (N = 27)−3.8%11:16−0.5320.595
OUTSIDE (N = 5)−6.3%1:4−0.7140.475
3ALL9.5%19:112.6810.007***
IN (N = 17)10.1%11:61.6180.106
OUTSIDE (N = 13)8.8%8:52.4030.016**
DOI: https://doi.org/10.2478/ijme-2022-0014 | Journal eISSN: 2543-5361 | Journal ISSN: 2299-9701
Journal RSS Feed
Language: English
Page range: 279 - 298
Submitted on: Apr 14, 2022
Accepted on: Jul 27, 2022
Published on: Sep 30, 2022
Published by: Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
event analysis,
market efficiency,
price reaction,
restructuring proceedings
Related subjects:
Business and economics,
Political economics,
Economic theory, systems and structures,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2022 Błażej Prusak, Marcin Potrykus, published by Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Previous articleVolume 58 (2022): Issue 3 (September 2022)Next article