Ethics, bankruptcy and greed: the unintended consequences for landlords of the 2005 bankruptcy amendments

Harlan D. Platt, Christopher R. Mirick and Marjorie B. Platt

International Journal of Business Governance and Ethics, 2011, vol. 6, issue 3, 249-263

Abstract: The 2005 amendments to the United States Bankruptcy Code dramatically shifted the relative power of commercial landlords vis-Ã -vis their tenants. Landlords lobbied Congress for these amendments to capture the option value of unexpired commercial leases. The result has been a decrease in the number of successful retail reorganisations. Viewed purely from a profit making perspective, the landlords' actions are hard to criticise. However, ethical theories, such as Integrated Social Contracts Theory (ISCT) and Corporate Social Responsibility (CSR), envision a broader set of responsibilities in a business context, to which the landlords did not adhere in their quest for higher profits.

Keywords: integrated social contracts theory; CSR; corporate social responsibility; USA; United States; legal codes; BAPCA; bankruptcy abuses; abuse prevention; consumer protection; statutes; statutory acts; laws; liquidation; reorganisation; code amendments; options; commercial leases; real estate leases; financial crises; commercial landlords; tenants; retailers; retail trade; greed; unintended consequences; relative powers; US Congress; option values; unexpired leases; profit making; higher profits; ethical theories; broader responsibilities; business governance; business ethics. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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