Several generations ago, a person who declared bankruptcy was looked upon as someone who welshed on his debts and obligations, a person who didn’t honor his commitments. Such people consequently lost fiscal credibility, along with a great deal of honor and respect.

Today, hardly a day goes by without a new report of some company taking the bankruptcy route to avoid its financial obligations. In so doing, creditors are left in the lurch, most often causing them to suffer severe financial losses.

A news report Monday told of a nearby company, Kansas City, Mo.- based Birch Telecom, that elected to declare bankruptcy with officers of the company reportedly saying the action would put the company on a path to better financial health. In the proposed deal, major lenders to the company would take control of the company, bondholders would get a stake of the ownership and current shareholders would be left with nothing. The company carcass may be on a path to better financial health, but many investors have lost everything.

The same general story is being repeated time and time again with companies as large as WorldCom, as well as many smaller operations that take the bankruptcy route to get out from under massive debt.

Something needs to be done to make bankruptcy much more difficult or painful for those who choose to walk away from their obligations and leave investors holding an empty bag. It’s too easy these days, and those engaged in the process seem to have no qualms about their actions.

The same day Birch Telecom officials announced their plans to file bankruptcy, another nearby company, Vanguard Airlines, announced it also intended to use this device to get out from under massive debt. At the same time, Vanguard ceased operations.

Even though company officials knew their action would cause all flights to be canceled, airline tickets continued to be sold. The next day, airline personnel said they would try to get other airlines to accept the worthless Vanguard tickets, but why did they continue to hustle ticket sales when company officials knew there would be no flights? This deception is unethical and dishonest and offers one more example of why the public is being turned off by the actions of far too many publicly held businesses.

There are two, almost guaranteed, results of such actions. First, the general public becomes far more likely to be suspicious and cynical of everyone in business, private as well as public, even those with a long history of excellence and honesty in running their companies. There will be an almost automatic assumption of guilt if charges of unethical, unfair or dishonest management are directed at some company official who has conducted himself and his business in an exemplary manner.

Also, scandals in the business community are sure to encourage calls for more government control or involvement in publicly held businesses. The fallout coming from the Enron and WorldCom incidents is clear: more government intervention and control, more government regulation.

If giant companies such as Enron and WorldCom and businesses of all sizes were operating in an honest way, and if those serving as directors had demanded integrity by all employees, there wouldn’t be a need for more government control. There are far more honest individuals in public and private business than there are rotten apples and careless directors interested primarily in their fat directors’ fees, but, unfortunately, bad apples are giving the public every reason to be suspicious of all businesses and CEOs. This is particularly true of publicly held companies.

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Along with Monday’s announcements by two Kansas City firms that intend to file bankruptcy and the action of the airline people selling tickets for flights they knew would be canceled, there was another event in Wichita Monday afternoon that illustrated how essential integrity, honesty and moral practices are to the success of a business. It was almost the opposite of what has been surfacing in many embarrassing and sad business-related stories around the country.

The Koch Foundation has been generous in funding many programs and activities in Kansas, and the Koch family and the foundation were recognized Monday evening for a major contribution to the Kansas University Endowment Association to support the KU School of Business.

It was refreshing to hear Koch officials emphasize the importance of those in business management to demand honesty and integrity in all phases of their operation.

If a business is to remain healthy, attract good employees, have good equipment and turn out top-quality products, it must be a profitable operation. But, as Koch officials pointed out, the best way to ensure lasting success for all parties is to make honesty and integrity paramount in the operation.

Koch employees may be known as tough, demanding operators and skilled, hard-nosed negotiators, but they stress honesty.

It’s great to have a company and family such as the Kochs interested and involved with KU and its School of Business. It is hoped the Koch involvement will cause KU business faculty members to stress the importance of honesty and integrity, as well as the importance of making a profit, when training our country’s future business leaders and accountants.

Somewhere along the line, this moral compass seems to have been forgotten by far too many business leaders, accountants and board members.