Corporate Accountability (2) Who Benefits from Bankruptcy?

Corporations essentially are creations of the state, by charter. It is an odd approach when the law currently provides for a corporation to be shielded from its creditors, in a bankruptcy. This places the interests of current executives and directors over those of their creditors, which is precisely what should not be allowed if they have failed in their fiduciary duties to the business. Those who go into bankruptcy should not be allowed to continue managing or profiting from the situation.

As such, corporate charters should be subject to revocation, in extreme cases, such as bankruptcy or gross violations of the law. Rather than close a business, however, states should be able to “condemn” such businesses, assume ownership, and auction them off to new owners and management. This would protect workers from the follies of executives, and provide income for the state.