One of the most clever innovations in business was the corporation, which allows a business to rise and fall on its own merits. If the business goes bankrupt the owners are not personally liable and as a consequence people can start a new business without risking their entire financial future.
The bankruptcy of Extended Stay Hotels, according to the Wall Street Journal, triggered "bad-boy provision" that made the owner of the chain personally liable for one hundred million dollars. The goal was to deter any rush to bankruptcy. This interesting breach of the corporate protections against personal liability was in turn modified: the creditors, faced with the reality of cash flows and consequences, will shield the owner against at least some of the personal liability. In other words, they've had to accept that disaggregation of personal and business finances can lead to better business decisions.
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