The decision for a business to file for protection under Chapter 11 of the Bankruptcy Code can be influenced by the implication of the long-term returns that may have to be involved. The revenues will exceed the liquidation of the assets of that business organization (Patterson, 2017; Ohlhausen & Okuliar, 2015). Thus, creditors can recover some of their incomes if they accept a business reorganization or figure out a payment strategy that favors most of the stakeholders. Evidentially, some ethical frameworks can be critical in determining an appropriate move for a business. The three frameworks that may apply to Chapter 11 are utilitarianism, deontology, and virtue ethics.
A utilitarian framework is significant is assessing the forthcoming results and proposing the most appropriate outcome that favors most of the individuals. The framework helps in considering the realistic strategy that favors most people if not all (Blumenthal, 2015). Practically, not everyone will benefit equitably from any direction an organization takes.
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A deontological framework is considered when the businesspersons are expected to act ethically by taking the right steps out of their duty to act in that manner. Considering this framework, the first obligation to be pushed in a business is to safeguard the rights of shareholders and creditors (Blumenthal, 2015). Therefore, the initial efforts of the business will be channeled towards returning the money of the investors. It is the major duty of the business to earn investors profits and return their money even if it involves asset liquidation.
Virtue ethics is founded on the characteristics that are upheld in an organization, which eventually helps in choosing a course of action. A business organization that can ethically control of all stakeholders will definitely do well as far as favoring them is concerned (Ohlhausen & Okuliar, 2015). The organization will always be focused on their goodwill towards all stakeholders.
All the bankruptcy laws are significant to innovation since business models have become dynamic in these contemporary times. Businesses are exposed to new situations on a daily basis that they have to respond to accordingly by applying the right laws (Pridgen, 2018). For instance, some businesses attempt to fraudulently assert bankruptcy. There could be special cases in each of these situations and might need innovation in the laws.
References
Blumenthal, A. (2015). Circumventing Concepcion: Conceptualizing Innovative Strategies to Ensure the Enforcement of Consumer Protection Laws in the Age of the Inviolable Class Action Waiver. Cal. L. Rev. , 103 , 699.
Ohlhausen, M., & Okuliar, A. (2015). Competition, Consumer Protection, and the Right (Approach) to Privacy.
Patterson, M. R. (2017). Antitrust Law in the New Economy: Google, Yelp, LIBOR, and the Control of Information . Harvard University Press.
Pridgen, D. (2018). The Dynamic Duo of Consumer Protection: State and Private Enforcement of Unfair and Deceptive Trade Practices Laws.
