ABSTRACT
The very existence of the domestic Chapter 11 refutes the conventional wisdom about market economy as a natural selection mechanism by which only the "fittest" will survive. The idea of Chapter 11 starts, historically and logically, from the premise that international financial markets are not efficient (in the technical sense of the term). If financial markets were efficient there would be no need for even the domestic Chapter 11, since in an efficient market the "good" enterprises in temporary trouble could always signal themselves out by getting higher interest loans from financial markets. The very fact that a "good" firm could go bankrupt in a market economy requires a new understanding of the nature of market economy.
