North Bank has a loan receivable from Westminster Dance Company. Westminster is late making payments to the bank, and Kevin McHale, a North Bank vice president, is helping Westminster restructure its debt. McHale learns that Westminster is depending on landing a $1,500,000 contract from Envy Theater, another North Bank client. McHale also serves as Envy’s loan officer at the bank. In this capacity, he is aware that Envy is considering declaring bankruptcy. McHale has been a great help to Westminster, and Westminster’s owner is counting on him to carry the company through this difficult restructuring. To help the bank collect on this large loan, McHale has a strong motivation to help Westminster survive.
Requirements
1. Identify the ethical issue that McHale is facing. Specify the two main alternatives available to McHale.
2. Identify the possible consequences of McHale identifying Envy’s financial position to Westminster Dance Company.
3. Identify the correct ethical decision McHale must make based on the two alternatives identified in Requirement 2.