Enron

* To what extent can our legal system ensure order and stability in society and particularly, in the business world?

As stated by Lindquist, S. and Cross, F ( University of Texas School of Law) Stability, Predictability and Rule of Law, Without stability and predictability in law, citizens would have a difficult time managing their affairs effectively (Eskridge and Frickey 1994). Legal stability also has a moral valence , we should trust that like cases will be treated equally . Moral valence could be “unjust but loving”, or “unjust but necessary,” “ and knowing the moral valence of something doesn’t always tell us what to do,” as stated by Levine, P ( March 2014 ) a professor of Philosophy at Tufts University.

Refernces

Lindquist, S. and Cross, F ( University of Texas School of Law) Stability, Predictability and Rule of Law, Retrieved from http://www.utexas.edu/law/conferences/measuring/The%20Papers/Rule%20of%20Law%20Conference.crosslindquist.pdf

Peter Levine, Webblog, (2014), Retrieved from http://www.peterlevine.ws/philosophythread.htm

* Give a recent example from your research concerning any alleged failure of the legal system that led to instability in business and society.

Enron one of the largest energy corporations collapsed. They filed chapter 11 Bankruptcy and the collapse of the market affected all of its stakeholders. The corporate failure of the Enron caused serious economic, political and social dislocation. The use of special purpose entities (SPEs) allowed them to perform risky trading operations in a way that did not properly reflect their balance sheets. The asset-light strategy, the SPEs, and the off-balance-sheet they provided to Enron seem to be the root cause of Enron’s failure.

The decline in the value of Enron stock affected the retirement savings of thousands of ordinary Americans who had no direct connection to Enron. Many Americans invest in retirement savings and mutual funds , because Enron was dropped too late...