Friday, February 13, 2009

Bankruptcy

Financial bankruptcy, that is, to go with the moral bankruptcy the company declared when it knowingly shipped tainted food.

The peanut processing company at the heart of a national salmonella outbreak is going out of business. The Lynchburg, Va.-based Peanut Corp. of America filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Virginia Friday, the latest bad news for the company that has been accused of producing tainted peanut products that may have been sent to everyone from poor school children to disaster victims.

[...]

The government is working on a criminal investigation into the case, and more than a dozen civil lawsuits have been filed. This week, Peanut Corp. president Stewart Parnell repeatedly refused to answer questions before the House Energy and Commerce investigations subcommittee, which is seeking ways to prevent another outbreak. But e-mails surfaced indicating he ordered products the company knew were tainted to be shipped anyway.
The moral of this story: Cutting corners for short-term gain is bad both ethically and financially. But I suspect that the lesson many CEOs will take from this tragic, criminal story is to be careful what you write in e-mails.

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