Question
Turnip Company, a multinational enterprise headquartered in State T, ordered its subsidiary in State R, the Radish Company, to close and to declare itself bankrupt.
Turnip Company, a multinational enterprise headquartered in State T, ordered its subsidiary in State R, the Radish Company, to close and to declare itself bankrupt. The Radish Company did so. However, it did not give its employees adequate notice of its closing, and its assets were inadequate for funding the termination payments due to the employees under State R law. In the bankruptcy proceeding, the employees asked the bankruptcy tribunal to order Turnip to fund the termination payments that Radish owed them. In support of this, the employees introduced evidence establishing that Turnip had known for some time that Radish was an unprofitable subsidiary and would have to be closed; and that, in anticipation of this, it had taken assets belonging to Radish out of the state so that they would be unavailable at the time of the bankruptcy liquidation. How should the tribunal rule? Explain.
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