Editorial: Companies play games with bankruptcy
Bankruptcy isn’t supposed to be child’s play, but too often companies big and small use it as a way to cheat at tag.
Remember when you were a kid and someone wouldn’t play the game so much as game the rules? They would taunt “come and get me!” as they hugged close to base, ready to reach out and claim freedom whenever anyone came close?
Didn’t you hate playing with that kid?
Wouldn’t you hate doing business with him now?
That kid could do business recklessly, racking up bills far larger than his ability to pay them off.
Maybe he would be like Three Rivers Regatta promoter LionHeart Event Group. Company President Derek Weber signed off on a Chapter 7 bankruptcy petition filed Friday.
Chapter 7 is the process that says “not it!” The assets are liquidated and used to attempt to pay off creditors. LionHeart has less than $50,000 in assets that will be spread around bills that total between $500,001 and $1 million, according to court filings.
That money is owed in part to the people of Allegheny County.
LionHeart has organized and promoted events such as the regatta and the EQT Flashes of Freedom Celebrate America fireworks display and is being sued by the sheriff’s office for almost $33,000 in security.
An audit was being done after the regatta’s cancellation amid unpaid bills. The city said in July it would investigate possible criminal actions.
Maybe that kid would be like Purdue Pharma, the drug giant that fulfilled expectations and filed for bankruptcy on Sunday night after working on settling thousands of lawsuits connected to its OxyContin narcotic amid the opioid crisis the owners themselves called a “tragic public health situation.”
Days after putting a deal worth up to $12 billion — including $3 billion or so from those owners, the Sackler family — on the table, the company is saying “whoopsie” with its bankruptcy. Chairman Steve Miller stressed the settlement deal isn’t an admission of wrongdoing.
The move can read like a threat as the company claims legal costs are eating up the money that would go to clean up the opioid mess and several attorneys general, including Pennsylvania’s Josh Shapiro, rejected the settlement and are pursuing the Sacklers separately.
It is that kid again, demanding that you play by his rules or else.
There is a time and a place for bankruptcy. It can be an important part of redirecting a company in distress or settling debts amid dissolution.
It isn’t a way to play the game until you are about to lose and then say “I quit.” At least, it’s not supposed to be.
Grow up already.