Unedited
10/7/11
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Bankruptcy

When a business is going bankrupt they sometimes do things that ordinarily might be considered unethical or dishonest. For example, a building contractor knows he is headed into bankruptcy. Even knowing this he goes ahead and orders thirty thousand dollars in windows for a house. The windows arrive and he installs them. He pays himself handsomely in expectation of financial collapse. A week later he files for bankruptcy. Since he does not pay for the windows the lumber company goes after the owners since they have lien rights on the house. The owners must pay for the windows even though the contractor was fully paid for them.

• Constructive Taking ?
• Constructive Fraud ?
• Deception ?
• Mismanagement
• Incompetence