Life before Bailouts
by Paul Staley
Thursday, 13 November 2008
Before the government began bailing out Wall Street and the
banks and now, the talk is the auto industry there was
Bankruptcy .When Corporate America got in trouble there was
Chapter 11 reorganization. This is what was and still is the
first line of defense for the average guy and American
business.
Wikipeda defines Chapter 11 as follows: Chapter 11 is a
chapter of the United States Bankruptcy Code, which permits
reorganization under the bankruptcy laws of the United
States. Chapter 11 bankruptcy is available to any business,
whether organized as a corporation or sole proprietorship,
and to individuals, although it is most prominently used by
corporate entities. In contrast, Chapter 7 governs the
process of a liquidation bankruptcy, while Chapter 13
provides a reorganization process for the majority of
private individuals with unsecured debts of less than
$336,900.00 and secured debts of less than $1,010,650.00 as
of April 1, 2007
American Business has used Chapter 11 to get rid of debt
that they could no longer keep on their books. This kept
people working and business open though the business would
change. It worked for a good many American businesses and
they lived to see another day . After the nightmare of
September 11, 2001 Delta airlines had to file Chapter 11 and
has since come out of the proceedings. Many companies can
get through this reorganization but some of course don't.
Most recently ,the Congress seems to believe that the
American taxpayer should pay for these upheavals in the
system. But the problem is we the American taxpayer, didn't
take the risk .The Managers, owners and shareholders took
the risk in that business ,they had the chance to win but
conversely they had the chance to lose.. There has always
been a remedy for these business crisis's. What we have seen
in the past is these time-honored legal remedies work. We as
a system have a way to move on , we file bankruptcy .It is
not pleasant or what we plan but it works and people
move on.
