61Narra National High School Understanding Culture, Society, and Politics

1. Name: ________________________________________________ Grade 12 _____________Score______
ACTIVITY NO. 61 What do you think?
Matthew, Mark, and John, being good buddies since high school, decided to put up a
corporation named MMJ Corp. The articles of incorporation state that they will be selling
beauty products. They borrowed money from the banks using their cars as collateral. The
first 3 years of operation became successful because they were able to dominate the
market.
As years passed, numerous competitions emerged, their sales gradually dropped, and their
profits are now dwindling and near bankruptcy. They are behind in loan payments, owes
money from suppliers, behind workers' compensations, and owes taxes to the government.
It seems as if MMJ Corp. will go out of business. Matthew, Mark, and John are worried that
creditors will force them to turn over their personal savings and sell their cars to have money
to pay their business debt.
1. Can MMJ Corp. creditors force Matthew, Mark, and John to turn over their personal
savings and sell their cars to pay the debts? Why or why not?
2. Do you think it is fair to the three buddies? Do you think it is fair to the creditors?
Explain.