Self-study
P1
Traditionally, corporate bankruptcy law placed highest priority on the orderly discharge of debts; courts generally ordered failed businesses to pay all creditors a set percentage of the amounts owed. ███
Traditional Approach ·
Discharge of debts is top priority
Modern Approach ·
“Reorganization” allows company to continue operating
Argument for Traditional Approach ·
Bankruptcy is solely to pay back creditors
Example of traditionalist: Jackson
P2
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Critique of Traditional Approach ·
Traditionalists do not consider other interests (employees, communities)
P3
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Argument for Modern Approach ·
Fairness for all parties through (1) inclusion and (2) rational planning
P4
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Main Conclusion ·
Modern approach is more equitable but also has weaknesses
Premise 1 ·
Credit will be more expensive
Premise 2 ·
No way of assessing vulnerability to loss
Passage Style
Critique or debate
16.
The passage most helps to ███████ ██ ██████ ██ █████ ███ ██ ███ █████████ ██████████
a
What is the ██████████ ████ █ ███████████ ██████████ ██████████████ ████ ██████ ████████████ ████ ███████████
The author never gives us information about the chances that a corporation undergoing reorganization will emerge successfully from bankruptcy. Is it 10%? 50% We have no idea.
b
What percentage of █████████████ ███████ ████ ██ █████████ ██ ███████ ██ █████████ ██ ██████ █████████████
The author never gives us information about the percentage of contractually secured debt that is recovered.
c
What arguments does ███████ █████ ██ █████ ██ ███ ████████ ██ ██████████ ████
d
What kinds of █████████ ███ ████ ██████████ ██ █████████ ██████ ████ █ ███████████ ██████
The author never gives information about which kinds of creditors are “most” vulnerable to financial losses when a corporation fails. In fact, she says that
e
What are some ██ ███ ██████████████ ████ █████ ██ ██████████ ███████ ████ █████ █ ████ ████████ ██ ███ ███████ █████████ ██ ██████
Regimes that place a high priority on orderly discharge of debts are the traditional regimes. The author never gives us information about the inefficiencies that exist in the traditional regimes. All we know about efficiency is that