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Has Cahn been knowingly trading while insolvent? | 214 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Has Cahn been knowingly trading while insolvent?
Authored by: tiger99 on Wednesday, September 26 2012 @ 12:02 PM EDT
Yes, but the liabilities clearly exceeded the assets by a very large margin, which is the condition for insolvency. It has nothing to do with Chapter 11, which is supposed to provide an opportunity for reorganisation by protecting the company from its creditors for a limited period of time. In the UK that would be called "administration", and often leads to some assets being sold, others reorganised, and the company being rehabilitated, whereas as we know, Cahn bled SCO dry.

In most parts of the world, a company which is insolvent goes straight to Chapter 6, liquidation, or its local equivalent. If they cover it up and continue to trade, when they are found out it is likely that directors (or the administrator or Chapter 11 trustee who take the place of directors) are likely to go to jail.

Surely insolvency is recognised in the US as a condition where the business can not continue and must be liquidated at once? If not, I fear that there is something very wrong with US law.

[ Reply to This | Parent | # ]
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