[Commentary] © 2000 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Bankruptcies Jul-Sep/2000

9/28/2000  1 bankruptcy mention -

9/22/2000  1 non-bankruptcy mention -
9/20/2000  1 bankruptcy mention, with $1B debt -
9/19/2000  2 bankruptcy mentions, with $495.7m + unreported debt -
  1. Specialty Foods is filing for bankruptcy, Bloomberg via NYT, C4.
    ...A leading maker of cookies...a unit of GWI Inc..\..filed for bankruptcy protection [without listing] assets and liabilities in its Chapter 11 petition. [However] in an August filing with the SEC, the company listed $303.9m in assets and $799.6m in debts.
    [OK, so it's 799.6-303.9= $495.7m in the hole.]
    Much of that debt is tied to a $1.1B leveraged buyout of eight food companies by Robert M. Bass, the Texas billionaire, that led to the formation of Specialty Foods in 1993, said Lisa Gaffney, a bond analyst at Deutsche Bank in NY.
    [Another hit&run LBO artist enriches himself by ruining others. Is this kind of scam designed OUT yet?]

  2. General Cinema parent mulls bankruptcy filing, Bloomberg via Boston Globe, E3.
    ...if it can't get concessions from creditors..\..  GC Cos...has struggled under the costs of operating expensive megaplex theaters and declining attendance....
    [Picked up by NYT 9/20 "General Cinemas may consider bankruptcy", C4.]

9/16/2000  1 bankruptcy mention, with unreported debt -
9/13/2000  1 bankruptcy mention, with unreported debt -
9/08/2000  2 bankruptcy mentions, with unreported debt -
  1. Assets of crime site acquired, Bloomberg via NYT, C6.
    ...APBNews filed for bankruptcy in July..\.. SafetyTips.com, based in Waltham, Mass., withdrew a [$950k] offer to acquire \it in Aug. but now has\ acquired its assets...for $575,000 in U.S. Bankruptcy Court in New York....

  2. Strouds Inc., NYT, C3.
    ...City of Industry, Calif., a bed and bath linens retailer, filed for Chap. 11 bankruptcy protection after an internal reorganization failed to stem losses. Strouds officials said they would close nine stores.
9/02/2000  1 bankruptcy mention, with $1B of debt -
  1. Pathmark Stores Inc., NYT, B3.
    ...Carteret, NJ, a regional supermarket chain with 136 stores in the NYC and Philadelphia areas, said yesterday that its restructuring plan was approved by the Federal Bankruptcy Court in Wilmington, Del. [eliminating] $1B of debt.

8/23/2000  2 bankruptcy mentions, with unreported debt -
  1. Paper company in Chapter 11 to idle Michigan factory, Bridge News via NYT, C4.
    Crown Vantage Inc., a...manufacturer [of] paper used in printing, publishing and specialty packaging..\..which is under Chapter 11 bankruptcy protection, recently agreed to sell all assets of its Crown Paper Inc. unit for about $375.9m in cash and assorted debt and options....
    [See also today's downsizing page re Crown Vantage.]

  2. Facing ruin from lawsuits, Anglicans in Canada slash budget, by James Brooke, NYT, A6.
    TORONTO...- With lawsuits by former students of Indian boarding schools threatening to bankrupt the Anglican Church of Canada, this week the church started slashing its national budget by 11%...to save money for legal bills.... From the late 19th century until 1970, boarding schools for Indian children were run by four Christian churches in Canada.... In recent years, there have been complaints ranging from accusations that administrators failed to crack down on pedophiles to charges of destruction of cultures, religions and languages. Today, the Anglican Church, which ran 37 schools, the 2nd-largest number after the Catholic Church, is the target of 350 lawsuits, representing 1,600 plaintiffs. Last year, the Synod, which has assets of $7m, spent $1m in legal fees....
    [See also today's downsizing page re the Anglican Church of Canada.]

8/22/2000  2 bankruptcy mentions, with unreported debt -
  1. APBNews may be bought, by Marcin Skomial, NYT, C6.
    ...A faltering Web site covering crime, justice and safety that sought Chapter 11 bankruptcy protection last month...agreed to be purchased for $950,000 \by\ SafetyTips.com, a site that specializes in safety consulting and training...based in Waltham, Mass..\..but the deal is subject to competition from other bidders and would need the approval of the federal bankruptcy court in New York....

  2. Student Advantage said to be buying out troubled rival, Syre & Stein, Boston Globe, C1.
    ...CollegeClub.com, based in San Diego [and] used by 2.9m registered students at 3,600 college and university campuses...filed for Chapter 11 bankruptcy protection yesterday, sources said....
8/19/2000  1 brief bankruptcy mention, with unreported debt -
  1. AmeriServe to be purchased by [Wal-Mart's] McLane [unit for $??], AP via NYT, B4.
    AmeriServe Food Distribution Inc., a supplier to fast-food restaurants, which filed for bankruptcy protection earlier this year, agreed to be bought by the McLane Co., a unit of Wal-Mart Stores Inc....
    [See our 2/01 story.]
8/17/2000  2 bankruptcy mentions, with unreported debt -
  1. [general -]
    Bankruptcies defy growth in furniture - Old-fashioned retailers undercut by upstarts, by Leslie Kaufman, NYT, C1.
    Two recent failures by furniture sellers [Heilig-Meters and Living.com] show that the furniture business is joining the retail clothing business in a much more competitive area where poor execution is increasingly fatal.... Living.com was the less significant of the two bankruptcy filings because selling furniture of the Internet is an experiment that many feel will not pan out soon. ...Heilig-Meyers...was struggling because it still hewed to the old school of furniture retailing [where] stores...made money not so much by selling sofas and chairs but by offering credit to low-income people to buy merchandise and then making a profit on the terms of the loan. This focus on financing as opposed to product explains why many older furniture chains were grim places with ugly stock and dim lighting.
    [Oh is that why!]
    ... [But] credit card companies...lowered income requirements, allowing even relatively poor customers to shop wherever they liked.... [Plus] there has been an explosion of rent-to-buy retailers, [lower-price competition from the likes of] Rooms to Go [which] offers discounts to buyers willing to pay for a package ofo merchandise for [a whole] room [and higher-price competition from] Pottery Barn and Crate & Barrel, which sell lifestyle and ambience with their leather club chairs and pewter picture frames....

  2. [specific -]
    Judge shelves plan [to restrict] sale of online database, NYT, C2.
    BOSTON...- A federal bankruptcy judge set aside an FTC plan today limiting the ability of an online toy retailer to sell its customer database as part of its liquidation [although the] data...had been collected with the promise of confidentiality. ...The judge, Carol Kenner, said [yester]day that in the absence of a buyer, the Commission's action was premature....
    [Doesn't this public servant have anything better to do than split hairs and jerk around people's privacy?]

8/17/2000  2 bankruptcy mentions, with unreported debt -
  1. Furnishings retailer files for bankruptcy protection, AP via NYT, C4.
    ... The Heilig-Meyers Co. filed yesterday for Chapter 11...and said it close 302 furniture stores.... The closings will leave the chain, which is based in Richmond, Va., with 596 stores and about 12,900 employees in 29 states.... The bankruptcy petition lists assets of $1.35B and liabilities of $868m. In recent weeks, many of Heilig-Meyers' furniture suppliers either stopped shipping products to the company or required the company to pay cash.

  2. Online furniture seller Living.com calls it quits, by Beth Healy, Boston Globe, C11.
    [NYT version is "Living.com to file for bankruptcy," AP via NYT, C9.]
    ...Austin, Tex.-based Living.com posted a notice on its Web site saying it...would file under Chapter 7 of the US bankruptcy code to liquidate the company [because] it was unable to raise more money to stay in business, having already raised $67m in three rounds of venture capital funding.
    [The dot-com shakeout continues. And note the potential domino effect, for example -]
    Amazon.com...took an 18% stake in the company in February, plus another 9%...in the form of warrants, after Living.com agreed to pay $145m over 5 years to be the main furniture seller on Amazon's site....

8/16/2000  3 more bankruptcy mentions, with unreported debt -
  1. Cheaping out on the elderly, editorial, Boston Globe, A22.
    The United States is trying to provide for the long-term care of its infirm elderly on the cheap. One result of inadequate reimbursements for nursing homes is that approximately one-sixth of the [nursing] homes in Massachusetts are in bankruptcy....

  2. AMF Bowling has 7 weeks to redo debt, by Patrick McGeehan, NYT, C8.
    ...The world's largest operator of bowling alleys has been given 7 weeks to come up with a plan for reorganizing its debts or risk being pushed into bankruptcy court....
    [No figure given for the amount of debts, just mention of a $13m payment that's due on Sept. 15.]

  3. The past is future - Getting back to Filene's Basement's roots will save ailing retailer, new owner says, by Chris Reidy, Boston Globe, C1.
    As brides-to-be prepared...today for the store's legendary bridal-gown sale, the chain's new chief executive [Alan R. Schlesinger] said the local retail institution must return to its traditions if it is to regain profitability....
    [Hear, hear! "Constant friend and occasional wife" Kate bought her Cinderella-style wedding gown at the legendary bridal-gown sale in spring 1988.]
    An Ohio retailer [Value City Department Stores] rescued the Wellesley-based chain and bought it out of bankruptcy protection earlier this year....

8/15/2000  3 bankruptcy mentions, with $735.1m + unreported debt -
  1. Bankruptcies surge in Japan, by Miki Tanikawa, NYT, C4.
    The number of corporate bankruptcies in Japan rose 21.4% in July from a year earlier, to 1,617 cases , wit a record debt of...$39B, according to Teikoku Databank, a Tokyo-based credit research organization. The figure...reflected the collapse of a department-store chain, the Sogo Co. and its affiliates, which contributed nearly $27B, or 69% of the total amount of debt.... Company failures could grow even faster [now because of] the decision by the Bank of Japan to guide short-term interest rates higher for the first time in a decade.
    [Or, with some incentive to risk lending out money, banks may actually lend more and slow company failures. Japanese fatcats have evidently been experimenting broadly with their own economy and consumer base - as we are - but not only with downsizing but also corruption. And now we're seeing the results of those experiments. How different from the days when W. Edwards Deming directed the Japanese economy!]

  2. Reliance Group [Holdings] hints at bankruptcy filing, Bloomberg via NYT, C2.
    ...The insurer controlled by the financier Saul Steinberg...probably [will] not be able to repay $735.1m of debt maturing at the end of the month and might seek bankruptcy protection....
    [Also mentioned on 8/18/00 in "Aon is buying accident and health unit from Reliance," Bloomberg via NYT, C4. Reliance finally did file, according to "Reliance Group seeks bankruptcy protection," Reuters via 6/13/01 NYT, C4.]

  3. Burnham [Pacific] Properties shareholders seek liquidation, Reuters via NYT, C4.
    A group of shareholders in [a] REIT [will] try to replace current directors at an Oct. shareholder meeting with a slate dedicated to liquidating the company...at a price no lower than $8 a share of common..\..because of a loss in shareholder value....

8/12/2000  2 bankruptcy mentions, with $7.6m + unreported debt -
  1. Trend-Lines files for Ch. 11, Dow Jones via Boston Globe, C1.
    Trend-Lines Inc. and its Post Tool Inc. unit yesterday filed petitions to reorganize under Chapter 11 of the bankruptcy code.... In June, Trend-Lines reported a loss of $7.6m...citing weakness in its golf operations [and] announced plans...to sell its golf business and focus on its tool operations, including its chain of 118 Woodworkers Warehouse stores..\.. New York-based Trend-Lines...expects to complete the sale of its Golf Day unit by early September....

  2. Value America files for bankruptcy and shuts web site, Reuters via NYT, B3.
    The beleaguered online retailer...filed for Chapter 11 bankruptcy protection and...shut down its Internet retail operations [in order to] focus on its electronic services business, which involves developing online operations and infrastructure systems for 3rd-party manufacturers, vendors and distributors, allowing them to conduct their business on the Web.... The company, based in Charlottesville, Va., created a frenzy among investors with its initial stock offering in April 1999, but it has been struggling for several months to avoid bankruptcy.
    [The fragmentation of the Great Internet Bubble goes on.... Bankruptcy aka corporate extremis is the only justifiable cause for corporate downsizing in the Timesizing economy of the future. But before it got to this point, a company would have been trimming hours ("Timesizing") along the way, so that as pressure mounted to "avoid bankruptcy," everyone would have gradually less money and more freedom in terms of free time to come up with ideas. Companies often like to "focus" on key business areas when they're in trouble like Value America, but this ignores a vital but just as important dimension of potential focusing - human resources. Under Timesizing, as a struggling company repeatedly trims hours&pay for everyone, the least and most committed employees identify themselves - those least committed to the company by leaving first, and those most committed by their willingness to work their old hours or longer, or take the additional free time and come up with solution ideas, or work the old hours and contribute ideas. The whole time transformation happens gradually, enabling the pressured workforce to respond flexibly and increasingly under its own control at the individual-employee level.
    [The gradual Timesizing approach brings in an additional, creative wildcard to help the company. As the company and its employees respond to more external work pressure with more internal time freedom and optionality, the Timesizing requirement of reinvesting overtime-linked profits on the part of the company, and reinvesting overtime earnings on the part of individual employees - and reinvesting them in human resources in the overtime-pressured skills - tends to gradually and automatically reassign employees within the company to the most creative and inherently motivated (not money-motivated) human functions within the company.
    [Note that four positive transformations are happening under Timesizing -
    1. The whole stressed company is flexibly and gradually centrifuging control its from failing top executives toward its most inherently motivated ("committed") employees. So the top executives are becoming less isolated and lonely (and possibly less defensive and desperate and erratic) within their own company.
    2. Top executives are sacrificing along with their employees, in terms of decrementing their paid hours-per-week right along with their employees - the effect being that they are 'rejoining the human race' a bit as their relatively high (in some cases VERY high) pay comes down, gradually. This tests their commitment as well as everyone else's within the company, and incentivates the less committed among them to leave too - a lesser commitment, that while unidentified may have contributed to the company's declining fortunes and its less graceful "dance with the market."
    3. A number of areas of greater freedom and potential creativity are opening up -
      • more free time,
      • more old employees in new skill areas,
      • and possibly even more new employees from outside with fresh ideas, a totally external viewpoint upon arrival, and necessarily a very high potential interest in and commitment to the company, despite its struggles (or maybe because of them)
      As the company increases individual freedom&control and potential creativity both from within and without, the greater become its chances of a miracle - the greater its chances of invoking the unexpected ("YHWH"????) to come to its aid and rescue.]
    4. As a struggling company's troubles gradually mount, its workweek gradually decreases. This gradually increases the amount of overtime that each employee, including top executives, are bound to reinvest in human capital if they continue to work their old hours - which they won't do unless their dedicated or committed. As committed top executives seek ways to reinvest their incrementally greater overtime earnings, they will tend to draw in "the best and the brightest" of their existing employees, and possibly some new ones from outside - that is, to draw them in to their executive offices and into their greater resources. (Note that this reverses the concentration of wealth and the widening income gap. But more specifically...) This chips away at the wall of privilege - and insulation - that many top executives have built around themselves, a wall that in itself often seriously damages their ability to read and respond to markets.]
8/11/2000  1 bankruptcy mention -
7/29/2000  1 bankruptcy mention -
7/20/2000  1 bankruptcy mention -
7/19/2000  2 bankruptcy mentions -
  1. [new]
    Seiyo seeks liquidation, Bloomberg via NYT, C4.
    ...A Japanese property developer that is part of the Saison Group filed for liquidation at the Tokyo District Court with liabilities of...$4.8B....

  2. [old]
    Disney to make good on scholarship win - Backs prize offered by defunct Toysmart, CNET News via Boston Globe, C13.
    SAN FRANCISCO - A 7-year-old boy who won a $55,000 college scholarship from the now-defunct Toysmart.com will get all of the money he is owed, although other creditors are still waiting.... "Disney [which owned a majority share of the Waltham, MA-based website] has a long-standing history of supporting education," said Chris Castro, a spokeswoman for the Burbank, Calif.[-based Disney].... The scholarship was part of a Toysmart promotion the little boy's mother had entered him in last year. Toysmart notified the family in April that Nick [Hollenkamp of Columbus, Ind.] had been selected randomly as the winner. The site went out of business the next month. Other people owed money by Toysmart were glad to hear that Disney had set up the trust fund [for the boy]....
7/15/2000  2 bankruptcy mentions, including more Japan repercussion discussion -
  1. Innovative Chemical Solutions Ltd., NYT, B3.
    ...Providence, RI, which helps biopharmaceutical companies bring their drugs to market, filed its plan of reorganization under Chapter 11 of the federal bankruptcy laws.

  2. [even more on big Sogo bust -]
    Clouds hanging over Sogo bankruptcy lift a bit in Japan - A second troubled company is said to get help from a bank, by Stephanie Strom, NYT, B2.
7/14/2000  1 repeat bankruptcy mention, with repercussion discussion -
7/13/2000  3 bankruptcy mentions, involving $4.5B+? in debt -
  1. Japan retailer seeks bankruptcy protection, AP via NYT, C4.
    ...rejecting a government-backed [$4.5B] bailout offer after a public outcry over its cost.... It would have been Japan's largest corporate bailout..\.. The Sogo Co. asked the Tokyo district court for protection from creditors after accruing debts totaling about $17.4B.... The government [had said the bailout] would prevent the "social disorder" that a bankruptcy would have caused, including a chain reaction of failures among Sogo's suppliers. But critics argued that Japan, where government debt has reached record levels, was not in a position to forgive money owed to it.
    ["Damned if they do, damned if they don't." So now, fasten your seatbelts.]

  2. Pathmark files for Chapter 11 protection in Delaware, Reuters via NYT, C6.
    The regional supermarket chain...and five affliates filed for Chapter 11...yesterday. No stores will be closed or sold, there will be no layoffs related to Pathmark's [45-75 day] reorg proceeding and trade creditors will continue to be paid in the ordinary course of business....

  3. [And last, but not least -]
    Notice of deadline for the filing of proofs of claim against the debtors and of procedure to file proofs of claim, U.S. Bankruptcy Court for the District of Delaware via NYT, C6.
    [This legal notice takes up almost 2/3 of page C6. In addition to 7 rules for claimants (similar to contest rules), there are four columns of bankrupt debtors in small print. Let's see - there's 126 lines in each column, that's 504 lines altogether, and all but 64 lines match up to a numbered debtor. That's 504-64= 440 bankrupt debtors. This gives us some idea of the bankruptcy news that today's media cheerleaders are protecting us from.]
7/12/2000  1 bankruptcy mention, involving $55m in debt -
  1. Frederick's of Hollywood seeks Chapter 11 protection, AP via NYT, C4.
    [Boy, we must really be in trouble if this outfit can't make it!]
    The [54-year-old] lingerie company...plans to keep its nearly 200 stores and its catalog and Internet sales in operation. Frederick's filed its petition on Monday, and seeks to halt repayment of almost $55m in debt assumed when it was purchased last month by the investment firm Wilshire Partners....
    [Not clear whether it had this debt before the takeover as well anyway....]
7/08/2000  2 bankruptcy mentions, involving $7.5m + $?? in debts -
  1. Printer files Chapter 11, Bloomberg via NYT, B3.
    Master Graphics Inc., which provides commercial printing services...in 14 states..\..filed today for bankruptcy court protection from its creditors after failing to make $7.5m in bond payments.... A subsidiary, Premier Graphics Inc., also filed Chapter 11 papers in US Bankruptcy Court in Wilmington [Del.] today. Master Graphics has 1,900 employees.

  2. Shaw Group [with $600.2m] wins the bidding for [the assets of] Stone & Webster, Dow Jones via NYT, B3.
    ...in an auction proceeding held under Chapter 11 of the US Bankruptcy Code.... Stone & Webster, a Boston-based engineering and construction holding company, filed for bankruptcy protection in June.

7/05/2000  1 bankruptcy mention, involving $7m in debts -
  1. Crime news Web site to file for bankruptcy protection,
    by Felicity Barringer, NYT, C5.
    APB Online, operator of a criminal justice news Web site that recently foundered, plans to file for protection [from] creditors under Chapter 11 of the Federal Bankruptcy Code. Last month, [APB] laid off the staff and scrambled to find private investors to inject new capital into the debt-ridden site.... At the moment, APBnews.com has rehired about two dozen staff members and is updating the site....
    [= The usual morale-munging firing-rehiring dance of crisis-oriented American executives - instead of just munging and unmunging the company workweek - for everyone ("Timesizing, Not Downsizing").]
    But the enterprise still has $7 million in debts....
    [The two previous dot-com going-out-of-business/bankruptcy reports were Boo.com on Craftshop.com on 5/16 and 5/19 respectively.]
7/04/2000  1 bankruptcy mention -
  1. Texas nursing home financial crisis seen, AP via NYT, C15.
    AUSTIN, Tex...- Texas nursing home operators say they are facing a financial crisis in the next 2 years if the state does not increase reimbursement rates of help contain rising liability costs. ...Said Tim Graves, president of the Texas Health Care Assoc. which represents 700 nursing homes, "We're running on fumes."
    About 22% of nursing homes in Texas, with an estimated 23,000 beds, are in bankruptcy, and this could jump to as much as 45%, Mr. Graves said....

For earlier bankruptcy stories, click on the desired date -

  • Jan-Jun/00.
  • Aug-Dec/99.
  • Prior to July 31/99.

    For more details, see our laypersons' guide Timesizing, Not Downsizing, which is available online from *Amazon.com and at bookstores in Harvard and Porter Squares, Cambridge, Mass.

    Questions, comments, feedback? Phone 617-623-8080 (Boston) or email us.

    Top | Homepage