Federal bankruptcy system needs to declare itself morally bankrupt

Corporations and billionaires allowed to escape obligations to consumers by setting up shell companies that declare financial insolvency

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Editorials

October 27, 2021 - 9:36 AM

Hydrocodone is said to be one of the most common recreational prescription drugs in America.

The federal bankruptcy system is morally bankrupt. The system has been abused by corporations and rich people to the point that it no longer upholds the mission it was designed for: providing a limited shelter from creditors so financially strapped individuals and companies could either liquidate or reorganize and put their affairs back in order.

The mission has morphed into helping the rich hold onto their vast financial assets while ensuring the people they’ve wronged get nothing, or as little as possible. Two recent examples underscore how the system serves the rich rather than holds them in check.

Years before gaining fame for its coronavirus vaccine, drug maker Johnson & Johnson was facing a public relations disaster after losing a high-profile civil Missouri lawsuit related to cancer-causing asbestos in Johnson’s Baby Powder. A $2 billion verdict in favor of women who sued after contracting ovarian cancer went all the way to the U.S. Supreme Court, where it was upheld. A Missouri jury originally set damages at $4.7 billion, but the figure later got reduced in court.

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