[Avodah] T'uM

[Micha Berger]

On Thu, Jul 03, 2008 at 12:58:06AM -0400, Zev Sero wrote:
: But why would he expect him to feel such an obligation?  RMB isn't asking
: anything, he assumes without question that the borrower *has* such an
: obligation, and I'm asking why?  They're not his debts, they're the
: corporation's, and he set up the corporation for the explicit purpose
: that its debts *wouldn't* be his...

This is really where my head was, let's tell a different story...

Moshe and his son-in-law Baruch are in the shirt business. They commission
shirts to be made in China and sell to stores. One of their customers
goes under, while owing him $75,000. M&B Shirts is a small shop, and
will really be stressed by the loss. Barukh learns in shul that Avi, the
owner of the store, had known for a while that it was likely he would have
to close, and continued making orders from them. Wouldn't they be angry
about not getting as much forewarning as the store could have risked?

Aside from the fact that the person in question wasn't selling shirts,
that's roughly the same case, told from the other end.

And given the problem Baruch will now have making tuition (it's not
like he could ask his father-in-law <g>), didn't Avi have a moral duty
to inform B&M about the mounting problems?

Seeing the story from Baruch's angle makes Avi's moral duty self-evident
to me. Lifnei iver type thinking.

As for corporate entities in halakhah, RMJBroyde and R' SHResnicoff list
shitos in <http://jlaw.com/Articles/corporations.html> section V. IMHO,
worth reading. In section VI.A they discuss "Shareholders' Financial
Liability for Corporate Debts":
> ...                                                    Virtually all of
> the Jewish law approaches surveyed in this Article agree, although for
> different reasons, that this secular doctrine of limited liability is
> generally valid under Jewish law.

However, when applying this to Avi, realize that this means that if Avi
was off the hook, his friend Barukh the baker could say open over
Pesach! To quote from VIII:
> Assuming, for example, that the halakhic entity approach were correct
> across the board, it would enable the use of a corporate form to resolve
> countless Jewish law difficulties. The dilemma is that it might resolve
> too many problems. It would theoretically enable Boruch the Baker
> to form a corporation of which he is the sole shareholder, director,
> and officer. It would also allow the corporation not only to keep dough
> throughout Passover, but, if he hires non-Jewish bakers and salespersons,
> to sell dough throughout Passover as well as on the Sabbath and other
> Jewish holidays. Although it is possible that secular law creates the
> opportunity to use a corporation to circumvent Jewish law, this is an
> unsettling conclusion.

Why is that more unsettling than thinking he could borrow money and not
pay it back? Both are miSinai...

Tir'u baTov!
-Micha

-- 
Micha Berger             When a king dies, his power ends,
micha at aishdas.org        but when a prophet dies, his influence is just
http://www.aishdas.org   beginning.
Fax: (270) 514-1507                    - Soren Kierkegaard