Chilean Company Files for Bankruptcy in a US Court?

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So this has little to do with culture, but it’s weird and Chile-related and I feel like mentioning it. I was reading the financial newspaper here last week because I’m a big shot investor. Ja, ja. No. But I like to read all sorts of perspectives to get everyone’s ‘take’ on things. My point is that they mentioned a Chilean public transportation company that is seeking corporate bankruptcy protection. Now this is strange for two reasons. Firstly, the public transportation is a public-private system in Santiago with a number of players (I love that lingo; it is sort of game after all) who competed and then win their respective routes.

It seems strange to me that they need bankruptcy protection citing low ridership and increased fare jumping. In the time I’ve been here (5.5 years) the bus and train prices have in fact fully doubled (from 350 pesos to 700 pesos per trip, or roughly 20% of the minimum monthly wage just to get to and from work), and ridership is in fact up. I’ve definitely seen people hop on the bus without paying, but it’s usually after they’ve waited as seven or eight packed buses have gone by, or even empty ones but the driver doesn’t feel like stopping. In that same fancy money newspaper they talk about the high incomes these companies have been earning. They sure seem to be doing just fine.

Well the even weirder part is that this company is seeking bankruptcy protection in a US COURT. So I asked a student of mine who happens to be a lawyer and has also studied law in the US what he thinks about this new concept and he looked at me like I was nuts. I emailed him this article that says how and why this is beginning to happen, and it even says that a company can claim ‘residency’ if you will (my term) in a country by having property there, and property for these ends needs simply be a bank account. If only us humans could gain residency so easily! I though June from South Carolina made an interesting point: “The U.S. judicial system at every level is expensive to run & budgets have been cut for years. Considering U.S. corporations pay little to no taxes to support the public good, who is paying these costs? Is the middle-class getting stuck with yet another bill so corporations can get debt relief?” My wholly uneducated guess would be that the companies would be paying to use the system, but then again I used to think everyone in the world was generally good inside.

If these legal maneuverings make sense to you or you know something I certainly don’t, please don’t hesitate to enlighten!

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