Re: Bankruptcy

[andie nachgeborenen <andie_nachgeborenen@xxxxxxxxx>]

David talks like a lawyer, not a conservative. I'd say
the same thing (if I knew as much about bankruptcy).
But maybes ome would say we are all conservatives
(institutionally) as well as parasites. ;-> jks

--- Michael Perelman <michael@xxxxxxxxxxxxxxxxx>
wrote:
> I very much admire the way you handle yourself here.
>  We have had
> conservatives who have tried to convert us, usually
> in an antagonist way.
> Instead, you present your views and leave it there.
>
> Indeed, if I were facing bankruptcy, I would want to
> hire someone like
> you, although I could not afford your fees.
>
> On Wed, Jul 16, 2003 at 01:10:46PM -0700, David S.
> Shemano wrote:
> > Michael Perelman writes:
> >
> > >> One question that intrigues me is the class
> nature of bankruptcy.  PG&E
> > >> seems to be coming out of bankruptcy smelling
> like a rose.  WorldCom and
> > >> Enron seem to get quite lenient rulings lately.
>  I confess that I am not
> > >> an expert and would like to see such companies
> get spanked.
> >
> > The fundamental philosophical problem is, who is
> PGE, Worldcom, Enron?  If the company is insolvent,
> the shareholders are out of the money and the
> company is now owned by the creditors.  Therefore,
> if you spank the corporation (and not individuals
> who committed wrongdoing), you are effectively
> punishing the creditors, who are presumably innocent
> of any wrongdoing.
> >
> > >> Creditor, like the famous employees of Enron
> who could not dump their
> > >> stock, don't seem to get much sympathy from the
> courts.  Banks do.
> >
> > Banks are creditors, as are bondholders, trade
> vendors, employees, landlords, and tort creditors,
> and the law generally treats them pari passu.
> Generally, employees do receive symphathy from
> courts compared to banks and other institutional
> creditors.  For instance, it is routine for unpaid
> wage claims to be paid very early in the case before
> other creditors.  While it is justified as an
> attempt to maintain morale and retain the employees
> during the reorganization process, it does a reflect
> a general sense that the employees shouldn't get
> screwed while the big boys fight it out.
> >
> > There is a general conflict between secured
> creditors (usually banks) and unsecured creditors.
> The bank will often have a lien on all of the
> assets, so the unsecured creditors will attack the
> validity of the security interest in order to obtain
> repayment.  The conflict manifests itself at a
> theoretical in the drafting of the Uniform
> Commercial Code, which was recently revised in a way
> that makes it much more easy to obtain and protect a
> security interest, to the consternation of unsecured
> creditors,
> >
> > David Shemano
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael@xxxxxxxxxxxxxxxxx


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