Old World approach to defaults: debtors' prison. New, enlightened approach used in the U.S.: Let's see if we can work this out. In the arena of corporate reorganizations, leniency means that defaulting debtors are permitted to carry on. Managers, often the very ones who made a company insolvent, keep the business going while attempting to reschedule or wipe out the debts. "Debtor in possession" is the official designation for such a management, and it is the norm, even over the objection of creditors who might prefer to see either a court-appointed savior—a trustee, in bankruptcy parlance—or an immediate liquidation of assets. (For a related story, see p. 120.)
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