This paper describes a typology of failure processes within companies. Based on case studies and considering companies' ages and management characteristics, we discovered four types of failure processes. The first failure process describes the deterioration of unsuccessful start-up companies leaded by a management with a serious deficiency in managerial and industry- related experience. The second process reveals the failure process of ambitious growth companies. Those companies have, after a failed investment, insufficient financial means to adjust their way of doing business to the changes in the environment in order to prevent bankruptcy. Third, we describe the failure process of dazzled growth companies, leaded by an overconfident management without a realistic view on the company's financial situation. Lastly, the failure process of apathetic established companies, describes the gradual deterioration of established companies where management had lost touch with the changing environment. We also found that there is a great difference in the presence and importance of specific causes of bankruptcy between the distinctive failure processes . Errors made by management, errors in corporate policy and changes in the general and immediate environments differ considerably between each of the four failure processes.

In Belgium, the first financial distress models were estimated in 1982 by Ooghe and Verbaere. An overview is presented of the financial distress studies conducted in Belgium since then. Starting from the early models, the research efforts concentrated on the validation of those models are described, which led finally to the estimation of the 2nd generation of models in 1991 by Ooghe, Joos and De Vos. Some suggestions for further research are presented.