[Avodah] T'uM

[Zev Sero]

Micha Berger wrote:
> 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?

But did Avi have the right to give such warning?  Presumably at that
point he still thought he had a chance of turning his business around.
Suppose he had given the warning; M&B would not have sold to him, and
nor would anyone else, which would turn a probable failure into a
certainty.  The business would immediately have gone under, and Avi
would be out all the money and sweat and tears he had put into it.
But not only that; suppose he decided to be a "tzadik" and commit
corporate suicide by giving the warning; now think of Dovid, who lent
the business money years ago, and depends on it being repaid.  Now the
business has gone under, because of Avi's "tzidkus", and Dovid comes
to him with a taanah: what right did you have to deliberately destroy
the business like that?  And this is not just a moral taanah but a
legal one - he is very likely to prevail in court, if not in Beis Din,
because Avi really had no right to do it.  So long as he owed money
to others he had an obligation to run the business in a responsible
fashion, and to make a good faith effort to turn a profit, so he can
repay these investors.


> 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?

What about Avi's and Dovid's problems with the same tuition?  The only
case you could make is that if his existing creditors were EY, then he
should have made sure M&B were taken care of ahead of them, either by
giving them a warning in strictest confidence, that he doesn't give
other (EY) suppliers, or by paying them under the table before closing
the business.  But besides not being exactly honest, these actions
would put Avi at risk of serious trouble if he is caught; is it really
fair to expect him to put himself at that sort of risk for the sake of
his fellow yidden, who, though they don't know the exact state of his
business, do know that it is a LLC, and the risk that goes with that.


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

So see it from Avi's POV, and from Dovid's.


>> 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...

Because dinei momonos depend on the intentions of the people involved;
if they're doing business on the basis of secular law, or merchant law,
then that becomes the din.  If they all agree that the corporation
exists, then it does.  Hilchos Pesach, though, doesn't depend on what
anyone thinks; if the corporation is really just Boruch, pretending
otherwise doesn't change the din.


-- 
Zev Sero               Something has gone seriously awry with this Court's
zev at sero.name          interpretation of the Constitution.
                       	                          - Clarence Thomas