Abstract This paper discusses bankruptcyfraud and how the bankruptcy system, an arm of the United States District Court, is a critical component of the United States government because of the impact bankruptcy filings have on national and local economies. The first part highlights five of the main issues concerning bankruptcyfraud such as the conflict between the purposes of the bankruptcy system and the reality of the bankruptcy process and the issue of corporate responsibility and bankruptcyfraud. The second part of the paper reviews two cases involving bankruptcyfraud and it concludes with solutions for eliminating and/or reducing it.
From the Paper "Fourth, there is the issue of corporations and individuals who prey on debtors who are contemplating filing bankruptcy. Bankruptcy foreclosure scams target individuals whose home mortgages are in trouble. Scam operators operate over the Internet and in local publications, distribute flyers, target specific ethnic or religious groups, or contact individuals whose homes are listed in the foreclosure notices. These scam operators may promise to take care of an individual's problems with their mortgage lender or to obtain re-financing for the individual. Particularly bold scam operators ask individuals to hand over their property deed to the operator, and then make payments to the operator in order to stay in the home."
Abstract This paper discusses the problems involved with bankruptcyfraud, at the filing level and at the court trustee level. It then offers two solutions to these problems. The paper also includes a brief overview of how different countries deal with the issues involving personal debt and bankruptcy. Finally, the paper concludes with an ethical and reasonable recommendation based on an evaluation of the relevant research.
Table of Contents:
Introduction
Overview of the Bankruptcy System and Attempts to Solve its Problems through Reforms
Federal Agencies
Solutions to BankruptcyFraud Bankruptcy in Other Countries
Conclusion and Ethical Recommendations
From the Paper "As an additional means of ensuring less fraud in the bankruptcy system, before hiring investigators and court trustees, these individuals should be subjected to thorough background checks before employment. In addition, the hiring personnel can verify that employers are validating information such as qualifications and work experience stated on resumes, as well as checking references. By hiring appropriately qualified employees, the criminal justice system and the bankruptcy courts will have taken one important step toward eliminating fraudulent and unethical financial filing practices. By implementing all of these recommendations, the future of the bankruptcy system and courts in the United States appears bright and will no doubt fall prey to another cycle of fraudulent bankruptcy filings."
Abstract This paper examines the causes and consequences of Conseco's bankruptcy and its filing for bankruptcy in December 2002. It explores the similarities between Conseco and Enron. The author discusses the deep problems of the company's unit of Conseco Financial. It also provides brief and general background of the situation.
From the Paper "When Conseco Corporation filed for bankruptcy protection in December it followed in the notorious footsteps of WorldCom and Enron. Like Enron, Conseco was a holding company which had one problematic operating unit, Conseco Financial causing ..."
Tags:bankruptcy, Conseco, Enron, Gary Wendt, Steve Hilbert
Abstract This paper analyses the effects of the bankruptcy reform bill. It discusses who is helped or hurt by it and the balance of lobbying interests involved. The author explores the effect of the moral connotations of bankruptcy on a bill designed to favor the interests of the banking and credit card industries.
From the Paper "The essential feature of the Bankruptcy Reform Bill that passed Congress and was signed by President Bush is that it limits the bankruptcy options of households above the median income in each state Under the ..."
Abstract T|his paper explains the way to detect automobile insurance fraud and points out methods of investigating. The author relates sentencing for convicted fraud offenders. The paper reports the increasingly costly problem of auto insurance fraud.
From the Paper "Americans pay an exorbitant amount of money each year to insure their vehicles for which they have also paid handsomely. ... Americans paid an estimated ... billion for auto insurance. Why are costs so high? One factor that plays into the soaring rates of automobile insurance is the dramatic increase in car insurance fraud. Consider this scenario. A typical driver is driving through town innocently minding their own business on the way to ..."
Tags: automobile insurance fraud, car insurance, fraud, schemes, fraudulent, identity theft, claimants, insured, insurance company
Abstract This article summarizes and briefly discusses a Department of Justice bulletin article that reports on the nature of fraud in America. The writer examines the prevalence, extent, and nature of fraud. The writer also discusses how common fraud is. The financial damage of fraud to individuals is also discussed.
From the Paper "Well-functioning communities in which individuals feel safe and cared-for and are best able to give back to other community members are built on trust. People agree to trust each other enough to give and receive support whether that support is financial, emotional, spiritual or otherwise. Thus a society without trust is less of a functional community. The lack of trust intrinsic to societies where lying, cheating or twisting the truth ... "
Tags:fraud, social psychology, scams, Department of Justice, crime
Abstract This paper discusses the "notorious" case of academic fraud by Sir Cyril Lodowic Burt as presented by H. Beloff. The research focuses on the ethical problem presented, the ethical principles breached according to the Australian codes of ethics, the motives and justifications of a commitment of this breach, justification for such actions and solutions for dealing with instances of academic fraud. The paper states that while a brief discourse on the case of Sir Cyril is provided, the primary purpose of the case is to prevent fraud from occurring in the future.
Outline:
Academic Fraud Cyril Burt
Ethical Issues and Disputes
Code of Ethical Conduct
Proposed Solutions and Actions
From the Paper "The cardinal principles of the Australian Code of Ethics as dictated by the Australian Ethical Society (2003) suggest the following principles must be applied in psychology and in evaluation of academic fraud: (1) professionals have a duty to act using well-informed conscious decision-making, (2) professionals engaged in academic investigation have a duty to act in the interests of the community they serve, (3) professionals and academics have a duty to accept responsibility for the health, safety and welfare of their community before the welfare of their private or personal interests and (4) professionals have an obligation to act with honesty and in good faith to the community, and apply their skill and knowledge in the interests of the community."
Abstract This paper explains that, after it was discovered that several major corporations in the U.S. had committed accounting fraud, it became the responsibility of auditors to discover evidence of accounting fraud in businesses. The paper discusses the impact of Sarbanes Oxley as well as SAS 99 on auditors and on the companies they audit.
From the Paper "Many decisions in accounting and auditing involve judgment calls. Nevertheless, there are rules that cannot and should not be broken. Over the last several years a number of major publicly traded corporations in the United States have committed accounting fraud and as a result have filed for bankruptcy protection. John Weinberg, in "Economic Quarterly", comments that these bankruptcies have resulted in the loss of hundreds of billions of dollars in stock value, wiping out the life savings of numerous investors and putting tens of thousands of..."
Abstract The paper presents an analytical research report regarding the problem of corporate fraud and the lack of ethics that is leading to scandals and serious ethical and legal violations.
Outline:
Corporate Fraud and ethical problems in Business world
Enron: A case in point
What has been done?
From the Paper "There is probably one name that doesn't escape anyone's mind when we talk about corporate fraud. And this name is that of Enron. No discussion of corporate fraud is ever complete without the name of Enron. Enron was formed when two energy companies, Houston Natural Gas and InterNorth, decided to merge their operations in 1985. The company achieved tremendous success, as energy trading firm and it was the first firm of its kind where energy was traded as any other commodity. In the short span of 15 years, the company managed to gain rise to heights of success as it turned from a regulated natural gas company into world's largest energy trader. With 21,000 employees and operations in more than 30 countries, the company it seemed was doing extremely well and this was further supported by the evidence presented by its auditors."
Abstract The paper looks at the effects on investment and employment that the bankruptcy of Enron has had on the economy. The positive effects on accounting standards and procedures are also highlighted.
From the Paper "The world's biggest bankruptcy ever, caused by fraud, misleading accounts and less than honorable, although legal, auditing practices was filed on December 2, 2001-shattering the integrity and trust of even the most credible businesses that will never be replaced. (Economist Editors, The Enron Scandal, paraphrased). Now, no business is above suspicion. Some experts believe that the Enronitis has had more of an impact on the economy than the terrorist attacks. This report will be discussing the impacts The Enron Downfall had on the economy."
Abstract This paper examines the Enron collapse and scandal and looks at how Enron was able to conceal its negative debt from its accounting books. The paper also looks at what segment of the population was hurt most by the Enron collapse and explains why the executives at Enron responsible for what has been deemed the worst case of deception, greed and fraud in the history of Corporate America, should be prosecuted by the US Department of Justice.
Outline:
Enron's Employees
How Did It Manage To Conceal Debts
Enron Investors
Political Connection
Conclusion
From the Paper "Enron's bankruptcy then took the world by complete surprise, as this was not only the biggest collapse in the United States in recent years, it was also the fastest. Before filing for bankruptcy in December last year, Enron was the seventh largest company of the United States as it turned its businesses into monopolies by dominating all areas of its various operations. But a company that looked so powerful only a year ago collapsed dramatically when one of its accountants began raising questions about those shady transactions which had managed to conceal the company's negative debt position from its accounting books. But slowly and gradually Enron's problems began unrolling in front of the public and it became clear that all the profits shown by the company were simply an illusion. "
Abstract Bankruptcy is not an easy process, and the average individual does not possess the knowledge to enter into proceedings on his or her own. The paper argues that professionals should always be consulted as they can determine which bankruptcy is appropriate or whether bankruptcy is necessary at all. The paper also looks at the bankruptcy court, which has been established to protect and assist individuals, companies, and corporations in their proceedings.
Paper Outline
A. Federal Bankruptcy Code
a. Explanation of the Origin
b. Federal Bankruptcy Law
c. Jurisdiction of Courts
B. Chapter 7 Liquidation Bankruptcy a. Procedure
i. Filing a Petition
ii. Meeting of Creditors
iii. Appointment of Trustee
iv. Proof of Claims
b. Automatic Stay
c. Case Dismissal
d. Alternatives to Chapter 7 Bankruptcy e. Discharge
C. Chapter 11 Reorganization Bankruptcy a. Why choose Chapter 11
b. Plan of Reorganization
i. Who develops the Plan
ii. Steps in the Plan
c. Discharge
D. Chapter 13 Consumer Debt Adjustment
a. Chapter 13 Eligibility
b. Important Features
c. Filing
d. Automatic Stay
e. Plan of Payment
f. Confirmation of the Plan
g. Discharge
E. Chapter 13 or Chapter 7
F. Rights of Creditors
G. Conclusion
From the Paper "If you are living with little income and property you may be "judgment proof". Basically creditors cannot collect because you have nothing for them to legally take. Taking advantage of federal and state debt collection laws that protect a debtor from abusive conduct may stop harassment from creditors. Possibly, a debtor may negotiate with creditors and buy enough time to get back on his or her feet. Creditors may also agree to settle debts for less than is owed. Debtors may seek help from outside sources such as Consumer Credit Counseling Service. Finally, a debtor may pay over time with a Chapter 13 proceeding, which will be discussed in a later section."
Abstract This paper discusses the issue of bankruptcy and describes the court process aimed at helping individual consumers and businesses get rid of their debts or to set up a plan to repay them. The paper also provides a history of bankruptcy law and discusses some of the advantages and disadvantages of the law. The paper concludes with 12 myths about filing for bankruptcy.
Outline:
History and Evolution of the Bankruptcy Law
General Concept
The Bankruptcy Code
The Bankruptcy Process
Advantages and Disadvantages, Alternatives
Myths about the Bankruptcy Law
From the Paper "The concept of debtor default dates back to the time of the Code of Babylon's King Hammurabi in 1795 BC (ABC Amega 2006). The Code included early laws and rules for settling debts. In cases when the debtor could not repay, the creditor could confiscate his child, wife, slave or the debtor himself into bondage until the obligation was met. In ancient Greece and Rome around 31 BC, indebtedness remained a crime. It was only during the reign of Augustus that a distinction was made between the debtor as a person and his debts. The laws of the time allowed the debtor to choose between giving his property up or himself as repayment (Amega). The history of bankruptcy law consists of three phases (Duhaime 2007). The first phase involved basic debt collection. The Roman Law of the Twelve Tables in 450 BC provided for a method of dealing with debtors who could not repay their debts. Table III provided for a process, which first allowed the debtor to settle his obligation in 30 days or have someone pay for it for him. If the debtor failed, the creditor could bind the debtor with a weight of 15 or more pounds. The creditor could choose to feed him or not with a pound of meal each day. On the third "market" day, the creditor could divide the body of the debtor with other creditors among themselves. Under Roman law, the debtor who could not meet his obligation did not have to be cut into pieces but his creditor could have him imprisoned for life. The creditor also had the option to sell the insolvent debtor, along with his family, to permanent foreign slavery. The concept of imprisonment was adopted by some parts of India and with an added feature. The creditor could take the debtor's wife and, if he did, the act would cancel the debt. Under Charlemagne, the debtor had to surrender his possessions in order to escape or prevent imprisonment. Imprisonment remained an option for the creditor but torture was outlawed (Duhaime)."
This paper discusses whether the protection afforded to a U.S. carrier operating in Chapter 11 bankruptcy has a negative impact on the overall air transport industry.
Abstract This case study looks at the impact of Chapter 11 protections on the airlines requesting the protection and also at the financial impact on the overall airline industry. The writer discusses Chapter 11-bankruptcy protection that has been seen as a lifeline for companies on the verge of total financial collapse. The writer explains that the protection given by U.S. Constitution allows companies another chance to reorganize while being protected from meeting normal financial and operating obligations.
Outline:
Statement of Problem: Issues to be studied
Background
Bankruptcy Types of Bankruptcy Chapter 7 Bankruptcy Chapter 11 Bankruptcy Other Types of Bankruptcy Pre Deregulation Days Practices
Deregulation of Airline Industry in USA
Impact of Deregulation
Analysis
Post 9/11 Crises and their Impact on Air Travel Industry
Chapter 11 Protection Role in Supporting Sick Airlines
Assessment of Chapter 11 Protection on Airlines Industry
Related Issues
Discussions & Conclusions
Bibliography
From the Paper "The word bankruptcy comes from Latin 'bancus ruptus' which means broken bench. The roman custom allowed the creditors to smash the trading counter of the debtors to vent their anger. In 17th century England the debt defaulters were treated as criminals and thrown in the dungeons or given a death sentence. The punishment under the modern laws is not so hard and both debtors and creditors have rights under the bankruptcy proceedings.
In United States bankruptcy is a federal subject. States are not allowed to regulate the bankruptcy although they can make rules for debtor-creditor relationship. Bankruptcy law is contained in 'Title 11 of the United States Code'. It allows a debtor in financial problems to equitably divide his assets among the creditors. The 'straight bankruptcies' or liquidations distribute available assets among the creditors and release the debtors of any further obligations, even if the debts are not paid in full."
Abstract In this essay, the writer discusses the filing for Chapter 11 bankruptcy reorganization by Interstate Bakeries, the maker of well-known food products such as Twinkies and Wonder Bread. The writer explains that although Interstate had several options at its disposal to reduce debt and generate cash, ultimately Chapter 11 bankruptcy allowed Interstate to address its debt and cost problems without having to mortgage the company's future through overly deep cuts or sell-offs. The writer then looks at different types of bankruptcy and discusses the alternatives that were available to Interstate. The writer concludes that by filing Chapter 11 bankruptcy, Interstate was able to get a handle on its costs, alleviate its debt, and emerge as a stronger and more stable operation.
Outline:
Types of Bankruptcy Alternatives to Chapter 11: Pros and Cons
Conclusion
From the Paper "In a Chapter 11 bankruptcy process, the court and a company's debtors will approve a reorganization plan that, among other things, determines how much various creditors get paid. There are two classes of competitors: secured and unsecured. The secured creditors, such as banks, get paid first; the unsecured creditors, such as vendors, may get only pennies on the dollar. Chapter 11 sometimes allows companies to restructure contracts, such as union deals, which was a big problem for Interstate. At any rate, companies emerge from Chapter 11 with a much better debt and cash-flow picture."
"Municipal organizations, such as cities or school districts, have a form of bankruptcy similar to Chapter 11, which is called Chapter 9 bankruptcy. Chapter 9 bankruptcy allows a municipal entity to restructure its debt and reorganize its operations, similar to Chapter 11."
