Bankruptcy

Date: 2015-10-07; view: 564.

TEXT 2

If your business is going badly, you don't make enough money and build up many debts which you can't pay off, it's the first indication (sign) that you should take urgent steps to improve your financial position, otherwise you'll go bust and your business will go into liquidation.

It's common knowledge that the director of the company which has run bankrupt must make a statement of the company's affairs, listing its assets and liabilities, and giving reasons why it is in debt.

One of the biggest bankruptcy cases was that of William Rainbow in the U.S. in 1950s. His company dealt with buying, developing and selling property. The company was doing very well until mid-50s when the price of property fell sharply, and his company suffered enormous financial losses. Little by little Mr. Rainbow's debts amounted to a huge sum which he failed to pay off however hard he tried.

All bankers and other influential people with whom Mr. Rainbow was once on friendly terms refused to stretch a helping hand to him. William was in despair. Even his best friends turned their backs to him. At last the most dramatic time came when his creditors decided to bring an action against him (to sue him).

The court agreed that Mr. Rainbow could be discharged in 3 months' time if he paid half the sum of his debt. But William failed to do so, and soon was imprisoned. While in prison his nervous strain was so great that once in the morning he was found dead in his cell. "Committing suicide", was the conclusion of the prison's doctor. That was the end of once prospering business and its unlucky director.