The final numbers aren't in, but it looks like 2001 will be a banner year for bankruptcies.

In the first nine months, nearly 1.1 million people filed with bankruptcy courts says ABI World. On the business side, 255 public companies joined the debtors' parade according to BanruptcyData.com -- the most anyone has seen in a decade.

None of this is good. While Enron has dominated the news because of its size, hidden memos, off-shore partnerships and "unique" accounting methods, decent companies run by decent people have also run into hard times.

Remember Malden Mills, the Lawrence, MA manufacturer of Polartec fleece? In 1995 the factory burned down and 1,000 employees could easily have lost their jobs. It would have made great business sense for the owner of the privately-held firm, Aaron Feuerstein, to collect millions in insurance money and move operations overseas where workers are far cheaper.

Instead, Feuerstein re-built the factory and while it was closed for repairs paid his 1,000 workers full wages for several months. In the process, Feuerstein and Malden Mills became capitalist icons of a sort -- examples of what was possible in the best case.

Malden Mills now faces bankruptcy for a legitimate business reason: not enough sales to cover costs. But just about everyone is willing to chip in to save the company: union workers have agreed to a wage freeze and public donations are actually coming in through the mail.

You could make the argument that Malden Mills would have not now have financial problems had Feuerstein kept his wallet shut, allowed his workers to collect unemployment, and saved millions of dollars. That's what you would expect with most companies, that's probably what is taught in business schools, and that brings us to Enron.

Enron, as we are now discovering, is a bottomless pit of accounting curiosities. Enron in 2001 went from being the seventh largest company in the nation to our biggest bankruptcy. Thousands of employees have lost their jobs, and thousands of pension plans have been decimated. While company rules prohibited employees from selling shares in pension funds, company executives made million of dollars unloading Enron stock during the same period.

Something's not right. The people at the top of Enron were already rich. Why they needed to be richer is a mystery -- there is only so much you can eat.

Feuerstein is also rich. Very rich. But he could be richer still by stiffing his workers and relocating his plant to Malaysia, China, or Mexico. That would cut his costs enormously and return profitability to Malden Mills. But Feuerstein stuck with Lawrence and its high-cost workers.

In addition to accountants and regulators, there ought to be teams of psychiatrists and philosophers looking at Enron and Malden Mills. In both cases top executives were hugely wealthy, yet their behavior could not be more different.

When the numbers are in, it looks at though we may have a record year for personal bankruptcies in 2001. A slowing economy, lay-offs, troubled high-tech sectors, and in many cases personal irresponsibility have lead an army of people to the unpromising land of bankruptcy courts and damaged credit.

Given harsher standards due to recent rule changes, bankruptcy is not as easy a way to discharge debts as it used to be. In terms of real estate, a bankruptcy often means an end to ownership aspirations for two to three years -- not good news for brokers, builders, lenders or the myriad other people and industries which depend on home sales.

Not every bankruptcy is a by-product of greed or financial foolishness. As the expression goes, bad things happen to good people. We all make mistakes from time-to-time, we have all done things we would not do again. Like the old song says, "there but for the grace of God go you or I."

To those who have gone bankrupt because of unemployment, regional declines, medical debts, and other reasons beyond an individual's control, we need to extend every benefit-of-the-doubt allowed by the lending system. That will bring deserving people back into the homebuying process a little more quickly and help the economy in general.

As to Enron, I have a modest suggestion: A huge company in bankruptcy could surely use a fair, reasonable and experienced trustee. My candidate is Aaron Feuerstein....

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