A friend sent an interesting email offering a less sympathetic view of bankruptcies like the American bankruptcy. With his permission, I thought I would quote it in full here:
"David: I read your post. But it seemed to me that AA filing was, essentially, just another in the long line of U.S. board decisions over the last twenty-five years or so to use our liberal bankruptcy laws as a strategic restructuring tool to get rid of debt and contracts and employee obligations that they felt held back profitability and the stock price. Chapter 11 is a wonderful tool for people who are essentially amoral, as many people in business and most lawyers are."
"I remember when I saw the amorality that accompanies most Chapter 11's up close and personal for the first time. It was in July, 1977, when GAF Corporation, the company where I was SEC and finance counsel, did what was at the time a big divisional write-off and fired most of the workers at some factories in and around Binghamton, NY. I worked on the SEC and financial aspects, but what struck me was stuff I learned talking to managers in Personnel: for example, how none of the second and third-tier managers questioned instructions to do things "in the most effective way" -- just telling hundreds of factory workers they were fired when they reported for their shift at 7 A.M. or 8 A.M., and instructing them to go downtown to file for unemployment, declining to arrange with the state department of unemployment to set up tables at the factory where workers could file for benefits more easily."
"Actually, I'm not sure whether the department name had yet been changed from "Personnel" to "Human Relations." No matter; in my experience, "Human Relations" people are always the meanest, most unfeeling people around, people who live the Nuremberg Defense."