The legal mechanism that eliminates inefficient companies is bankruptcy. Competition through bankruptcy eliminates inefficient companies from the market, thus increasing the level of efficiency of other companies and reducing production costs. The decision on bankruptcy is made at the culmination of business difficulties. Bankruptcy proceedings are carried out in order to satisfy all creditors by cashing in the debtor's assets and distributing the collected funds to creditors. The sale of the debtor's assets and the settlement of creditors will result in the bankruptcy debtor's termination of existence, except in the case when the creditors do not accept the debtor's bankruptcy plan. The Croatian Bankruptcy Act prescribes the collective settlement of creditors by selling the debtor's property and dividing the collected funds among the creditors for the purpose of bankruptcy. The aim of the paper is to analyze the factors of the bankruptcy procedure in order to determine whether there is a possible possibility of "recovery" of the company that is in the bankruptcy procedure. Based on the research conducted with key stakeholders, bankruptcy administrators can draw several conclusions. The key reason for initiating bankruptcy proceedings is closely related to the company's inability to meet its obligations and over-indebtedness that does not allow recovery through bankruptcy proceedings. Continuation of business through restructuring is possible in the case when companies have a market position and material and human resources. Low rates of restructuring in bankruptcy proceedings are in most cases associated with late detection of difficulties and initiation of bankruptcy proceedings. Organizational changes, optimal number of employees and quality management are important factors in successful company restructuring. The recovery of the company is related to the change of the management that brought the company into bankruptcy, specifically such management cannot be included in the restructuring. If the crisis situation is inadequately managed and if the management does not undertake restructuring measures, the organization can be led to bankruptcy. The most important task of any management in the fight against the crisis is to ensure enough money for the continuous operation of the company, thus preventing the worst outcome, the bankruptcy of the company.