WHY BASU CHAPTER 13 BANKRUPTCY MATTERS... AND IT DOESN'T
Filing for personal bankruptcy (Chapter 13) is standard procedure when one owns a house and is named in a civil lawsuit. That is because a bankruptcy filing provides some level of protection against a judgment in the civil lawsuit that would seize the person's home. So, no one can really blame Basu for that choice. In fact, her attorney for the civil case probably advised her to do it.
The reason that this bankruptcy filing IS problematic for PPJE shareholders is not that it is related to PPJ or its assets. Basu's assets and PPJ's assets are legally two separate things. The reason that it is problematic for PPJE shareholders is that Basu is the CEO of PPJ and PPJ does not file audited financials.
If Basu was not CEO of PPJ, PPJE shareholders would not care about Basu at all.
If PPJ filed audited financials, there would be no doubts about the honesty of the financial information provided in the quarterly and annual corporate filings because the information would be verified by an independent source.
A personal bankruptcy filing automatically puts Basu into a compromised condition. Anyone who does a Chapter 13 filing is, by definition, financially distressed and financially distressed people cannot be trusted to conduct themselves in a honest manner.
This is a common sense rule to be applied universally. It is not a personal attack only on Basu. There is a reason that financially distressed people cannot obtain security clearances from government agencies. It is the same reason those people cannot obtain employment in the financial sector. It is the same reason that shareholders should worry when one of those financially distressed people is the CEO of their corporation.
Further, one must question the judgment of any individual to manage financial affairs if they get themselves into the situation where a Chapter 13 filing in their personal affairs becomes necessary. Naturally, if one cannot manage their personal financial affairs without the need to file for Chapter 13 bankruptcy, then shareholders must question the person's ability to manage the financial affairs of the corporation of which the person is the CEO.
Therefore, one could question the accuracy and honesty of the latest filing just issued by Basu on behalf of PPJ. However, it turns out that Basu already has such an extensive history of severely mangling corporate filings that in reality, nothing has really changed with Basu's personal bankruptcy. We could not believe a word of the corporate filings before Basu filed for Chapter 13 personal bankruptcy protection and we still cannot believe a word of the corporate filings now.
AI
