The reduction of business activities of enterprises caused by recession and the general situation in the economy and the fall in consumer power of citizens lead to problems of insolvency and a lack of liquidity. Crisis situations during the life cycle of an enterprise are not one of the few phenomena. In the Republic of Croatia one of the possibilities for overcoming such crises and problems of insolvency and a lack of liquidity stems from the legislative framework of pre-bankruptcy proceedings. Pre-bankruptcy enables financial and operational restructuring of companies in crisis, but does not guarantee successful overcoming of the crisis. This paper analyses the procedure of pre-bankruptcy settlement of a small business in the Republic of Croatia and its operations after the implementation of pre-bankruptcy settlement. Due to over-indebtedness and lack of strategy, the company has fallen into problems that have led to insolvency and lack of liquidity. The company sees the solution to the problem through the pre-bankruptcy settlement procedure because of the possibility of writing off part of the debt and installing the rest of the debt. The paper includes an analysis of the circumstances prior to the pre-bankruptcy proceedings, an analysis of the pre-bankruptcy plan for financial and operational restructuring and an analysis of the business operations of the company after the conclusion of the pre-bankruptcy settlement of Macan Ivĉek d.o.o