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Path: utzoo!linus!decvax!harpo!eagle!mhuxl!ulysses!princeton!eosp1!robison
From: robison@eosp1.UUCP
Newsgroups: net.legal
Subject: Re: Unintentional creditors in business bankrupcies
Message-ID: <438@eosp1.UUCP>
Date: Tue, 13-Dec-83 00:42:34 EST
Article-I.D.: eosp1.438
Posted: Tue Dec 13 00:42:34 1983
Date-Received: Wed, 14-Dec-83 02:23:25 EST
References: <1823@ihnss.UUCP>
Organization: Exxon Office Systems, Princeton, NJ
Lines: 24

If you go into a store, pay for merchandise to be delivered,
and the store goes bankrupt before delivery, you are in the same
fix that you are in if a mail order company goes bankrupt.
You are a creditor hoping to get your merchandise or your money back.
Your only edge is that you had a better chance to check out the store,
since you could see it.

I'm not sure why this situation seems "unfair".  It is certainly
unfortunate.  Here is the basic problem:  Almost all companies
do not keep enough cash on hand to pay off all their current debts.
It is a silly use of all that money to keep it just sitting
(in a bank, say) when it can be used in the business, e.g., to
purchase the materials that will be made into saleable items.
Not even a bank keeps enough cash on hand to pay off all of its 
accounts, should its customers wish to close them all.

Most businesses fail.  When they do, they do often not have enough
assets to pay off everyone.  If they pay you, they will have to fail
to pay someone else.

				- Keremath,  care of:
				  Robison
			          decvax!ittvax!eosp1
				  or:   allegra!eosp1