McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-1 Bonus Chapter A Working Within The Legal Environment 1-1

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-2 Branch of government chosen to oversee the legal system through the court system The Judiciary

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-3 Organized at federal, state, and local levels U. S. Court System

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-4  Trial Courts  Appellate Courts  Supreme Courts U. S. Court System

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-5 Hear cases involving criminal and civil law U. S. Court System Trial Courts

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-6 Defines crimes, establishes punishment, and regulates prosecution U. S. Court System Criminal Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-7 Involves legal proceedings that do not involve criminal acts U. S. Court System Civil Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-8 In federal and state systems, hear appeals of trial court decisions U. S. Court System Appellate Courts

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-9 In federal and state systems, may hear appeals of appellate court decisions U. S. Court System Supreme Courts

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-10 Sources of U.S. Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-11 Sources of U.S. Law Common Law Statutory Law Administrative Law Federal State Local Court Decisions FTC OSHAEPA SEC PUC FCC FDAEEOC

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-12 Statutory Law Written lawsWritten laws Includes:Includes: State and federal constitutions, legislative enactments, treaties of federal government, and ordinances.State and federal constitutions, legislative enactments, treaties of federal government, and ordinances.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-13 Common Law Unwritten lawUnwritten law Comes from decisions handed down by judgesComes from decisions handed down by judges PrecedentsPrecedents Decisions made in earlier cases that guide the handling of new casesDecisions made in earlier cases that guide the handling of new cases Lower courts must abide by higher court precedentsLower courts must abide by higher court precedents

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-14 Administrative Law Administrative agencies –Administrative agencies – Created by Congress or state legislatures with delegated power to pass rules and regulations within their mandated area of authorityCreated by Congress or state legislatures with delegated power to pass rules and regulations within their mandated area of authority Administrative Law JudgeAdministrative Law Judge

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-15 Administrative Agencies Administrative Law FTC OSHAEPA SEC PUC FCC FDAEEOC

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-16 Business Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-17 Rules, statutes, codes, and regulations established to provide legal framework within which business may be conducted and are enforceable by court action Business Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-18 Categories of Business Law BusinessLaw BankruptcyLaw TortLaw ContractLaw SalesLaw Law of Agency PropertyLaw

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-19 Tort Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-20 Tort Law Tort -- A wrongful act that causes injury to another person’s body, property or reputation.Tort -- A wrongful act that causes injury to another person’s body, property or reputation. An intentional tort is a willful act that results in injury.An intentional tort is a willful act that results in injury. Negligence -- An unintentional tort that causes harm or injury that was not intended.Negligence -- An unintentional tort that causes harm or injury that was not intended.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-21 Product Liability

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-22 Product Liability Product Liability -- Holds businesses liable for harm that results from the production, design, or inadequate warnings of products they market.Product Liability -- Holds businesses liable for harm that results from the production, design, or inadequate warnings of products they market.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-23 Strict Product Liability Strict Product Liability -- Liability without regard to fault; a company can be held liable for a defective product even if they didn’t know of the defect.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-24 Intellectual Property

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-25 Intellectual Property Patents Patents Copyrights Copyrights Trademarks Trademarks

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-26 Intellectual Property Patent – Exclusive rights to Invention – 20 years Patent – Exclusive rights to Invention – 20 years USPTOUSPTO

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-27 Patent Facts Patent applicants should seek the advice of a lawyer.Patent applicants should seek the advice of a lawyer. Foreign companies are eligible to file for U.S. patents.Foreign companies are eligible to file for U.S. patents. Patent owners have the right to sell or license the use of their patent to others.Patent owners have the right to sell or license the use of their patent to others.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-28 Intellectual Property, cont. Copyright - Rights to Literary Work and Art Work (including sound, visual, and performing arts) – lifetime of author + 70 yrs Copyright - Rights to Literary Work and Art Work (including sound, visual, and performing arts) – lifetime of author + 70 yrs LOCLOC Trademark - Protects Name, Symbol, Design, or a combination of, and identifies goods or services of a seller – belong to owner forever Trademark - Protects Name, Symbol, Design, or a combination of, and identifies goods or services of a seller – belong to owner forever USPTOUSPTO

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-29 Sales Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-30 Uniform Commercial Code (UCC) Uniform Commercial Code (UCC) A comprehensive commercial law that covers sales laws and other commercial laws. A comprehensive commercial law that covers sales laws and other commercial laws. WHAT’S the UNIFORM COMMERCIAL CODE?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-31 Adopted by every state Adopted by every state 11 Articles: 11 Articles: covers sales, commercial paper, bank deposits and collections, letters of credit, bulk transfers, warehouse receipts, bills of lading, and other documents of title; investment securities; and secured transactions covers sales, commercial paper, bank deposits and collections, letters of credit, bulk transfers, warehouse receipts, bills of lading, and other documents of title; investment securities; and secured transactions WHAT’S the UNIFORM COMMERCIAL CODE?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-32 Warranties (Article 2) Warranties (Article 2) Negotiable Instruments (Article 3) Negotiable Instruments (Article 3) Sales Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-33 Warranties Warranties (Article 2)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-34 Specific representations by seller that buyers rely on regarding goods they purchase Express Warranties

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-35 Legally imposed on the seller, who implies that a product will conform to the standards of trade. Implied Warranties

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-36 Negotiable Instruments Negotiable Instruments (Article 3)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-37 Forms of commercial paper, e.g., checks, that are transferable among businesses and individuals and represent promise to pay specified amount Negotiable Instruments

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-38 Four conditions for using negotiable instruments: 1.They must be written and signed by the maker or drawer. 2.Be made payable on demand or at a certain time. 3.Be made payable to the bearer. 4.Contain an unconditional promise to pay a specified amount. Negotiable Instruments

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-39 Contract Law

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-40 Contract Law Set of laws that specify what constitutes a legally enforceable agreement

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-41 Contract Law  Contract  Legally enforceable agreement between two or more parties  Legally Binding  An offer is made.  There is a voluntary acceptance of the offer.  Both parties give consideration.  Both parties are competent.  The contract must involve a legal act.  The contract is in proper form.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-42 Contract Law Breach of Contract -- When one party fails to follow the terms of a contract.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-43 Contract Law If a contract is breached the following may be ordered: Specific performanceSpecific performance Payment of damagesPayment of damages Discharge of obligationDischarge of obligation

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-44 Business Law/Legislation

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-45 Sherman Antitrust Act (1890) The Act Forbids: 1.Contracts, combinations, or conspiracies in restraint of trade 2.Actual monopolies or attempts to monopolize any part of trade or commerce

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-46 HISTORY of HIGH PROFILE ANTITRUST CASES CaseYearOutcome U.S. v. Standard Oil1911Standard Oil broken into 34 companies U.S. v. American Tobacco 1911American Tobacco split into 16 companies U.S. v. E. I. du Pont de Nemours 1961DuPont ordered to divest its 23% ownership in General Motors U.S. v. AT&T1982Settled after Ma Bell spun off into regional companies U.S. v. Microsoft2000Microsoft ordered to halt prior anticompetitive practices

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-47 Clayton Act (1914) Tying ContractsTying Contracts Interlocking DirectoratesInterlocking Directorates

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. A-48 The Federal Trade Commission Act of 1914 created the FTC and prohibits unfair methods of competition in commerce. The Wheeler Lea Amendment of 1938 gave the FTC additional control over false and misleading ads. The Robinson-Patman Act of 1936 prohibits price discrimination and applies to buyers and sellers. FTC Act (1914)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-49 Robinson-Patman Act (1936) Prohibits price discriminationProhibits price discrimination Applies to buyers and sellersApplies to buyers and sellers B2B transactions, not consumerB2B transactions, not consumer

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-50 Consumerism Social movement seeking to increase and strengthen rights and powers of buyers in relation to sellersSocial movement seeking to increase and strengthen rights and powers of buyers in relation to sellers The Consumer Product Safety Commission provides information concerning consumerism and consumer protection.The Consumer Product Safety Commission provides information concerning consumerism and consumer protection.The Consumer Product Safety CommissionThe Consumer Product Safety Commission

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-51 Tax Laws

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-52 Taxes Governments collect moneyGovernments collect money Encourage businesses to hire or purchase via tax creditsEncourage businesses to hire or purchase via tax credits Discourage citizenDiscourage citizen bad practice bad practice

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-53 Types of Taxes Income TaxesIncome Taxes Property TaxesProperty Taxes Sales TaxesSales Taxes Excise TaxesExcise Taxes

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Source: Tobacco Free Kids, accessed November SIN TAXES State Tax Rates per Pack of Cigarettes A-54

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-55 Bankruptcy

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-56 Bankruptcy The legal process by which a person, business, or government entity, unable to meet financial obligations, is relieved of those debts by a court.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-57 Bankruptcy Options Chapter 7 – Straight Bankruptcy (Liquidation)Chapter 7 – Straight Bankruptcy (Liquidation) Voluntary and InvoluntaryVoluntary and Involuntary Businesses and IndividualsBusinesses and Individuals

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-58 How Assets are Divided in Bankruptcy

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-59 Bankruptcy Options Chapter 7 – Straight Bankruptcy (Liquidation)Chapter 7 – Straight Bankruptcy (Liquidation) Voluntary and InvoluntaryVoluntary and Involuntary Businesses and IndividualsBusinesses and Individuals Chapter 11 – ReorganizationChapter 11 – Reorganization BusinessesBusinesses Chapter 13 – Repayment PlanChapter 13 – Repayment Plan IndividualsIndividuals

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. GOING, GOING, GONE Big Bankruptcies of A-60 Circuit City KB Toys Linens N Things Borders City of Detroit

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-61 Deregulating Commerce

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-62 Deregulation The government withdraws certain laws and regulations that seem to hinder competitionThe government withdraws certain laws and regulations that seem to hinder competition Deregulation efforts were active in:Deregulation efforts were active in: -The airline industry -Telecommunication -Some public utilities

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LE-63 Hamburger Regulations