Cardinal Principles The cardinal principles are general principles from which all the subsidiary rules and principles of bankruptcy emanate. They are like constitutional principles from which all the bye-laws originate. Principle I: Pre-liquidation rights shall be respected: All the rights of individuals who acquired a right against the debtor before…

As we have discussed earlier in the part dealing with the historical background of bankruptcy, in the earlier times bankruptcy applies to persons who involved in commercial activities. That is to say, it is only persons who involved in commerce that can be the subjects of bankruptcy. But later, because…

Elders witness that in Ethiopia the ancient society experienced similar practices like that of Romans. In the earlier times failure to perform promises (i.e. failure to pay back loans) which were given in monetary form or in exchange of goods for goods or bartering entails punishment. The punishment imposed on…