The Johns-Manville Corporation made a variety of building and other products. It was a major producer of asbestos, which was used for insulation in buildings. It has been medically proven that...

The Johns-Manville Corporation made a variety of building and other products. It was a major producer of asbestos, which was used for insulation in buildings. It has been medically proven that excessive exposure to asbestos causes asbestosis, a fatal lung disease. Thousands of employees of the company and consumers who were exposed to asbestos and had contracted this fatal disease sued the company for damages. In response, the company filed for reorganization bankruptcy. It argued that if it did not, an otherwise viable company that provided thousands of jobs and served a useful purpose in this country would be destroyed, and that without the declaration of bankruptcy a few of the plaintiffs who filed their lawsuits first would win awards of millions of dollars, leaving nothing for the remainder of the plaintiffs. Under the bankruptcy court’s protection, the company was restructured to survive. As part of the release from bankruptcy, the company contributed money to a fund to pay current and future claimants. The fund was not large enough to pay all injured persons the full amount of their claims. Was it ethical for Johns-Manville to declare bankruptcy? Select a school of social responsibility that the board of directors might use to rationalize its conduct in declaring bankruptcy. Explain. In re Johns-Manville Corp., 36 B.R. 727 (Bankr. Ct. S.D.N.Y. 1984).