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Water Pollution: Should Freedom Industries be permitted to file bankruptcy to reduce or avoid liability? Why?

  • Answer:

    Yes - for several reasons.  First, the company meets the requirements to file for chapter 11 bankruptcy protection under the United States Bankruptcy Code.  If a party does not feel that the company meets the requirements, there are avenues laid out in the Bankruptcy Code for that party to assert a challenge to the propriety of the bankruptcy filing.  The Bankruptcy Code also sets forth the right for a party to seek to have a bankruptcy case dismissed "for cause" and sets forth what constitutes "cause" for those purposes. Moreover, there are many historical examples of companies that have done significant damage to communities - whether environmental, financial, or otherwise.  Bankruptcy is designed to allow a breathing spell and to get representatives of all of the stakeholders (meaning the various groups of people who are impacted by the company's operations) to have a say in how the company's assets and liabilities are addressed.  This organized process governed by a set of rules and customs developed over decades offers a far superior alternative to the options which would exist outside of bankruptcy.

Anonymous at Quora Visit the source

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There should be an insurance that every company pays into, and the rates would depend on the danger the type of business can inflict. The company screw up and the insurance pays, the company would lose the right to do business, and those in management would be barred from ever working in that industry again, or depending on how bad their actions, maybe prison. Rates would set and lawyers would be cut out of the pie.

Nelson Hyde Chick

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