Bankruptcy in Vekllei

Part of the bulletin series of articles

Summary

• Large parts of the Vekllei economy are ostensibly owned by the Vekllei Government.
• Even though these companies are government-owned, they usually operate independently and some are profitable through foreign trade.
• While private companies in the domestic market can only effectively go “bankrupt” through prolonged labour shortages, government companies with accounted revenue can and do go bankrupt.
• The question then is how the Vekllei state handles bankruptcy of government-owned and major industrial firms, and to what it extent it allows ailing businesses to run at a loss.

The question of bankruptcy in Vekllei is hypothetical, since there is no legal mechanism for bankruptcy in court similar to other countries. Despite this, government-owned and public corporations interacting with foreign currencies have overt revenues and losses, and accounted revenue is used by the Ministry of Commerce to rate value and competitiveness.

There are many kinds of businesses, government-owned and otherwise, that are informally allowed to run at a loss and have no expectation of turning a profit. Most of these lie exclusively within the Vekllei domestic market, where revenues and expenses are only theoretical. Others, like Commonwealth Airways are expected to minimise expense but could reliably expect to be subsidised in perpetuity. Most such de facto guaranteed corporations occupy monopoly status in their market.

Others, however, operate competitively and consequently are expected to be able to fail. These include some government corporations, especially those that compete internationally. In this context, these corporations may be allowed to fail, which would look like this:

1. Freezing of debt and revenues via a court injunction.
2. Suspension of executive staff by executive council.
3. Sacking of appropriate staff, particularly those in leadership positions, and replacement by interim staff via the executive council or internally.
4. Restructuring of the company by a specialty firm, located in Vekllei or overseas, and operations reestablished by the executive council.

Executive councils in Vekllei are analogous to a corporate board overseas, and consist of persons mostly outside of the corporation. In the event the executive council is unable to assist or implicated in the bankruptcy, the Bureau of Trade can intervene and either reestablish or liquidate the company. Corporations may also be sold to foreign investors and jettisoned from the internal market entirely.