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Debt Relief – Insolvency – Bankruptcy Information » Bankruptcy Info » Can a CEO run a company bankrupt and simply walk away free?

Can a CEO run a company bankrupt and simply walk away free?

Lets say you’re an honest CEO of a company and have done nothing wrong like insider trading or fraud, and abide by all disclosure laws, etc. However, you are a poor manager in general and manage to bankrupt a company (liquidation or adminsitration) with billions of dollars worth of losses. Can you be charged for anything?

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2 Responses to "Can a CEO run a company bankrupt and simply walk away free?"

  1. Jamie K says:
    My understand is that the advantage of a Corporation is that it is a separate entity from the individuals who run it. This means that if it goes bankrupt, it is the same as your brother going bankrupt. Individuals are not liable for the debts of another individual under normal circumstances. Certain types of LLCs (Limited Liability Companies) and certain states’ laws may limit the abilities of a Corporate entity to protect Executives.

    Basically, the answer is yes. A crummy CEO (or one whose company simply becomes obsolete) can, in theory, walk way without any personal liability, especially if he cannot be charged with a crime or violation of company policy.

  2. Dave says:
    Yes, they can. Look at Dick Fuld.

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