Ethics of Penn Square Bank and the Dow Corning Bankruptcy Penn Square Bank: What were the ethical pressures on the firm concerning documentation, credit extension, and revenue recognition that lead to the final collapse? What should have been done to reduce or offset these pressures?
Penn Square Bank was a small commercial bank in Oklahoma City which made high-risk financial loans during the late 1970s in the oil boom. The bank ultimately collapsed during the early 1980s due to their financing practices. The bank was overestimating and valuing its customer’s gas and oil reserves that let at that time to fund a bigger credit line. In addition, the bank didn't request clients to complete…show more content… Some also complain that scar tissue formed around the implants, causing a hardening of the breasts. As a result, the ladies submitted injury legal cases against Dow Corning Corporation and asked payment for dangerous negative effects. Dow Corning has taken the positioning that they were being targeted for careless statements and they were the target of unmanageable legal system. The organization contends that they had tried and tested the products; however they didn't release any of the outcomes quoting private information. Internal memos suggested that Dow Corning Corporation did not pay attention to some animal tests, and ignored employees’ complaints about safety issues. It became clear that Dow Corning Corporation ignored these allegations and succumbed to competitive pressure by releasing a product to the market before testing the long-term effect it may have on its recipients ("Silcone Nightmare", 1999).
Dow Corning lost their first suit back in 1984 as well as the complainant Maria Stern received $1.7 million Dow Corning Corporation believed that this case triggered the explosion of breast-implant litigation. In response to the explosion of litigation, Dow Corning and two other producers of silicone breast implants, Bristol-Myers Squibb Co., and Baxter Health Care Corp., attempted to bundle the individual suits together in a class action suit. The companies agreed to pay $4.25 billion to
