Danny

Legal Environment of Business December 10, 2019

Rock Group Case Study Paper

Bankruptcy is a judicial declaration as to a person’s financial conditions that give a person a fresh start and give them an equal opportunity. There are many reasons to file for bankruptcy, but in this case, it is to get out of an unfair written contract. Taking the recording company to court to release the rock group from their contract could transpire for numerous years, and it is a great possibility that it will end in favor of the recording studio. The agreement states that the band will need to make eight recordings for them to be able to break the contract. That number of recordings could take up to twelve years to produce. Instead of going through those gruesome and lengthy processes, there is another way to relieve the group from their burden – filing for bankruptcy. One reason why bankruptcy laws are established is to free debtors from contracts that are viewed as problematic by the court to improve their current financial situation. There is a possibility that if the group accumulates a large sum of financial debt that they can alleviate themselves from the contract or at least obtain a renegotiation. This proposal could have an exceptional outcome for the group or completely backfire, leaving the artists in a bad situation at a very young age.

The situation of creating a plan and filing for bankruptcy is not completely ethical or morally right. Gaining debt to get out of a contract they reviewed and agreed upon is not ethically right since it will damage both parties. Many other people are suffering due to their financial burdens and are struggling to get back on their feet, the group will purposely be getting themselves in a large amount of debt. It will be painful for the other party (the recording study

and others they owe money to) since they won’t receive their part of the deal and lose a great deal of money. The court will create a plan that is not only reasonable but is in good faith and may see straight through the scheme. They will all get a huge amount of debt at the same time and it will look like a planned operation. Overall, they may ruin their reputation along with their credibility.

The rock ground filing for bankruptcy contains a lot of legal issues. They won’t only be gaining a large sum of debt, but it will be detrimental to their credit score for a long period of time. Any person who lives, owns a residence, place of business, or any property in the United States can file a petition of bankruptcy under the bankruptcy code. One requirement when filing for bankruptcy is the debtors must complete a ninety-minute credit counseling session six months before they file. It must be approved by the United States trustee’s office. After they complete the hours they may be allowed to file. This act allows the debtors from engaging in debt collecting actions or activities. In this particular case, they can file for chapter 7 or chapter 11 bankruptcy. Both chapters apply to any person and help preserve all physical assets. The debtor’s duties must cooperate fully with the trustee and make a schedule to help themselves get out of the financial situations they are currently in. The rock group, being on the younger, will be legally obligated to going through this vigorous process and not enjoy their time as youths.

All in all, the idea to release the group from their contract with the recording studio by filing for bankruptcy may be detrimental to their careers and any of their future financial decisions. A lawsuit may occur for years, but it would be the safest option to relieve the group of the unfair contract. The second option would be the group completing their eight recordings, and not having a definite future as successful artists. Filing for bankruptcy may be a destructive path but also could be a gate way to the rock bands successful career.