The possibility of immediate control over an advanced and often long-going crisis – in the Republic of Croatia – derives from the legislative framework and is located in the institute of pre-bankruptcy. Pre-bankruptcy represents an extra-judicial procedure that enables, first and foremost, financial restructuring of an illiquid and/or insolvent company – all in order to regulate its own legal position as well as its relation to creditors – while maintaining its activity. The research that was undertaken in this work includes the analysis of the circumstances that preceded the initiation of the pre-bankruptcy, the analysis of the pre-bankruptcy restructuration plan and its implementation in two different companies. One being Spačva d.d., initially considered as a positive example of pre-bankruptcy proceedings, and the other one being Varteks d.d initially thought to be an example of the poorly executed pre-bankruptcy procedure. The goal of this research was to determine the existence of the purpose of the pre-bankruptcy instruments seen as instruments of strategic crisis management as well as the justification of the restructuring processes that were carried out. Based on the conducted analyses, the conclusion can be drawn that the pre-bankruptcy is the preferred instrument for immediate and short-term crisis management. This proved to be a successful way of dealing with the crisis that affected Spačva d.d. as it enabled a successful strategic turnaround and allowed the company to cut loose its unprofitable segments, financially consolidate and change its ownership structure. As a result, investment potential was enabled, setting preconditions for long-term successful and sustainable business. On the other hand, in the case of Varteks d.d. the opportunities of the pre-bankruptcy as an instrument of strategic crisis management have not been exploited. The Company failed to undergo substantial financial restructuration of its liabilities or take any measures that imply a decisive turnaround. Furthermore, this case is an example of a poorly regulated legislative framework of the pre-bankruptcy institute since it was even possible to implement pre-bankruptcy procedures in Varteks d.d. to begin with. At this point, the company was no longer capable of forgoing pre-bankruptcy rather it was ready to file for bankruptcy instead. The premise of a successful strategic turnaround is the potential to achieve long-term profitability which inefficient and industry-uncompetitive business models are incapable of accomplishing. When the fact of overindebtedness is added to this situation, it becomes clear that the pre-bankruptcy procedure is too expensive. Especially considering that the investments needed to achieve a more efficient and competitive business model are lacking and instead, the existing financial resources are depleted in favour of putting down fires as they appear. Pre-bankruptcy, although a desirable instrument for immediate crisis management, in this form, is not sufficient in achieving a long-term effect since, if used alone, will not manage to accomplish a complete reconstruction of the problems that caused the crisis in the first place. In this case – and bearing in mind that within the pre-bankruptcy procedure, the emphasis is only on financial restructuring – it will, however, mask some of the symptoms of the crisis 103 without tackling the root of it. Until the legislative framework is improved, the sole responsibility falls on the management and owners to understand that financial restructuring alone will not ensure longterm sustainability and success. Rather, it is also necessary to tackle and manage the cause of the crisis on the operational level. This way, the crisis can be contained, controlled, and long-term profitability and efficiency of the business can be achieved.