The Value of the Bankruptcy Law

Creditors always have legitimate claims over a bankrupt’s assets. But not all claims are equal when dividing those assets.

Some lenders may have provided cheaper funds in return for a more secure claim over assets, were things to go wrong. Thus, they rank above others, when funds are allocated among lenders, Then there are employees and stockholders to consider when disbursing funds in bankruptcy.

But bankruptcy law is specific in the way scarce funds are to be allocated. Until the Obama administration came along and set its precedent for the Chrysler bankruptcy, giving the unions favored status for its own political solution for what ordinarily would have been business contract law.

Only in present-day America.