Design Engineer/Contractor Bankruptcy: Considerations for Debtor and Creditors
The bankruptcy rate within the American construction industry has been increasing in recent years. Despite its increasing frequency, many construction industry professionals remain unaware of what a bankruptcy proceeding entails. This lack of awareness is cause for concern to both debtors and creditors. This paper, therefore, is designed to, on an overview level, lay out the factors construction debtors and creditors must consider when deciding whether to file for bankruptcy. Assuming that the decision to file for bankruptcy has been made, the paper presents an analytical overview of the bankruptcy code in terms of its operative chapters, under which a construction‐related debtor might seek relief from creditors. Since the decision to file for bankruptcy fundamentally changes business relationships, models of both Chapter 7 and 11 proceedings are included to illustrate common occurrences. It is hoped that this paper will prepare construction‐related debtors and creditors for dealing with the possibility o...
Entropy for Business Failure Prediction: An Improved Prediction Model for the Construction Industry
This paper examines empirically the effectiveness of entropy measures derived from information theory combined with discriminant analysis in the prediction of construction business failure. Such failure in modern complex supply chains is an extremely disruptive force, and its likelihood is a key factor in the prequalification appraisal of contractors. The work described, using financial data from the Taiwanese construction industry, extends the classical methods by applying Shannon's information theory to improve their prediction ability and provides an alternative to newer artificial-intelligence-based approaches.
Surety Industry: Overview
The surety bonding process can be very frustrating for the construction contractor. However, if the contractor has a solid understanding of the process and knows what the surety requires, the frust...