I’ve always argued that bankruptcy law needs its Balzac, except that it has its Balzac, and his name is Balzac. In a broad sense, you could say that everything he wrote is about bankruptcy—or at least about commerce, and usury, and rapacity, and greed, and wild speculation, and all the things that made him Marx’s favorite novelist. He had first-hand experience—it is said that he equipped his house with a special back door, for the escape from creditors (he also took a mistress more than 20 years his senior who was the mother of nine children, go figure). He did write one explicit “bankruptcy” novel, Histoire de la grandeur et de la décadence de César Birotteau, about a guileless parfumiere, undone by an unworthy servant, but particular references are scattered through any number of other novels. One of the best bits may be the passage in Eugénie Grandet, where the Old Grandet, the miserly cooper, undertakes to de-besmirch the name of his late brother, the speculator and suicide:
Presently des Grasssins called a meeting of creditors, who unanimously appointerd the Saumur banker and François Keller, the head of a large business firm and one of the principal creditors, as joint trustees; and empowered them to do anything they thought necessary to prevent any doubt being cast on the good name of the family, or the bills. The credit Grandet of Saumur enjoyed, the hopes des Grassins roused in the hearts of the creditors as his agent, made this go smoothly. There was not a single dissident voice among the creditors. Nobody dreamed of passing his bills to his profit and loss account, and each man said to himself, ‘Grandet of Saumur will pay!’
Six months went by. The Parisians had withdrawn the bills from circulation, and had put them away underneath all their other business papers. This was the first result the cooper was looking for. Nine months after the first meeting the two trustees distributed forty-seven per cent of the amount owing to each creditor. This sum had been raised by the sale of valuables, property, goods and chattels belonging to the late Guillaume Grandet, a sale made with most scrupulous honesty. The delighted creditors acknowledged the undeniable and admirable integrity of the Grandet brothers. Having praised them and circulated their praises for a suitably decorous length of time, the creditors began to ask when the remainder of their money would be forthcoming. It became necessary to write a collective letter to Grandet.
‘Now we’re getting somewhere,’ said the old cooper, throwing the letter into the fire. ‘Have patience, my little friends.’
In reply to the propositions put forward in the letter, Grandet of Saumur asked that all the documents involving claims against his late brother’s estate should be deposited with a notary, together with receipts for payments already made, in order, so he said, that the accounts might be audited and to establish correctly just how much money was owed by the estate.
This all goes on for another page or so. Then:
Twenty-three months after Guillaume Grandet’s death, many of the merchants, in the rush of business life in Paris, had forgotten their claims against his estate, or thought of them only to say,
‘I’m beginning to think that the forty-seven percent is all I’ll see of that debt.’
And so it goes. Earlier, young Eugénie had asked the old cooper: ‘What is a bankrupt, father?’
‘A bankrupt,’ answered her father, ‘has committed the most dishonorable deed that a man can dishonour his name by being guilty of. … A bankrupt,’ he went on, ‘is a thief that the law unfortunately takes under its protection.’
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