Title: Ethical controversies of corporate bankruptcy
Abstract: From purely economic perspective, bankruptcy is nothing more than a market mechanism for correcting investment and managerial mistakes and failures. Regarding that the market, among other things, is a system of financial gains and losses, bankruptcy is a part and a result of sequential ladder of significant losses, and its ultimate consequence is business liquidation or reorganization. However, that is only economic aspect of the issue. Besides that, it is also important to consider social and moral dimension of this phenomenon. Debtors who are not in position to make payments to their creditors bring moral and ethical issues to aforementioned situation, because in the event of involuntary collection by creditors (which is not entirely possible) business can be temporarily liquidated without an opportunity to reorganize and revitalize; but on the other hand, somebody has to be liable for unpaid creditors' claims. Moreover, it is often the case that companies declare bankruptcy as a pretext for avoiding their own payment obligations. The aim of this paper will be to examine these controversies. .
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: article
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