There has been a wave of ill feeling spreading across social media in the wake of Freedom Industries’ chemical contamination of much of the drinking water in West Virginia recently, and there has been criticism of the firm’s recent Chapter 11 bankruptcy filing too, with the general idea that it is some obscure legal ploy to avoid responsibility.
Here’s a post shared on Google by stand-up comedy artist Wendy M. Lewis that pretty much captures the feeling:
But, whoa, not so fast! Outrage over environmental disasters is somewhat understandable, but there are a couple of things that need to be addressed here.
First, that “fun fact.” Companies can indeed file for bankruptcy if they have problems like Freedom Industries, and being barraged by lawsuits is as good a reason for a firm as it is for Joe Six Pack who hasn’t paid his credit cards lately.
But environmental problems do not get completely ignored in the bankruptcy process. Did you know that every bankruptcy filing, corporate and individual, has to declare upfront whether the debtor “owns or has possession of any property that poses or is alleged to pose a threat of imminent and identifiable harm to public health
More serious here is the idea that “students overburdened by college debt can’t file for bankruptcy”. That’s just not true. It is true that students loans are difficult to get discharged, but students and former students are not excluded en mass from bankruptcy court.
If you see these claims floating around on social media platforms, don’t be afraid to question their accuracy, even if you basically share the underlying sentiment.
By Doug Beaton