When a merchant in medieval Italy couldn’t pay his debts, the authorities came to the market square and smashed his bench, so he couldn’t do business anymore. “Banca rotta” or in Latin, “Bancus Ruptus,” bankrupt. How times have changed.
With all the recent Chapter 11 filings, talk is of “soft landings” for the airlines, the telecoms and energy corporations. Bankrupt merchants in old England might have had their ears nailed to the pillory, while a few might think about going after Ken Lay that way, there’s lots of talk that America’s bankruptcy laws in fact favor corporations over the little guy.
Is this the whining of people in a crashing economy, or is the oft-revised Bankruptcy Act really in need of a fairness fix? When corporations fail, I mean, reorganize.
Margaret Howard, Professor of Law at Washington and Lee University
Bettina Whyte, principal of Alix Partners and president-elect of the American Bankruptcy Institute
Aaron Feuerstein, chief executive of Malden Mills.