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

Authors: Harlan D. Platt; Christopher R. Mirick; Marjorie B. Platt

Addresses: College of Business Administration, Northeastern University, 413 Hayden Hall, Boston, MA 02115, USA. ' Cadwalader, Wickersham & Taft LLP, One World Financial Center, New York, NY 10281, USA. ' College of Business Administration, Northeastern University, 101 Hayden Hall, Boston, MA 02115, USA

Abstract: The 2005 amendments to the United States Bankruptcy Code dramatically shifted the relative power of commercial landlords vis-à-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.

DOI: 10.1504/IJBGE.2011.043240

International Journal of Business Governance and Ethics, 2011 Vol.6 No.3, pp.249 - 263

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 20 Oct 2011 *

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