Some analysts favor easy bankruptcy declarations because they allow management teams to recover from uncontrollable outside economic events and correctable management decision mistakes. How might you counter this argument both an practical and ethical grounds?
Businesses that declare bankruptcy are committing crimes if they knowingly and fraudulently file a false proof of claim, if managers tie about a bankruptcy schedule, or if they fraudulently conceal assets. More intriguing is the possibility of acting unethically when declaring bankruptcy while following the letter of the law.