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[Commentary] © 2001 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Bankruptcies, January-February/2001


2/16/2001  2 bankruptcies mentioned -

  1. Loews Cineplex files Chapter 11 as part of deal, Reuters via NYT, C4.
    ...to be acquired by an investment group...led by the Onex Corp. and includ[ing] the Pacific Capital Group and Oaktree Capital Management.... Loews has total assets of $1.8B and total liabilities of $1.51B [and will] immediately close aabout 21 theaters in the U.S....
    [See lead-in story on 1/23/2001 below. The emergence didn't stir till Nov. -]
    Loews Cineplex files bankruptcy recovery plan, Bloomberg via 11/13/2001 NYT, C4.
    The Loews Cineplex Entertainment Corp. filed a Chapter 11 recovery plan to give the Onex Corp. of Toronto and Oaktree Capital Management LLC of Los Angeles full ownership of the company and allow it to emerge from bankruptcy....

  2. Bridge Information files for bankruptcy, Reuters via NYT, C10.
    The financial news and market data company...filed for Chapter 11 [and] its largest shareholder...Welsh Carson Anderson & Stowe..\..made a bid to acquire the entire company. Bridge says its filing overtakes [i.e., supercedes?] the involuntary petition filed by its creditor Highland Capital Management on Feb. 1...represent[ing] less than 8% of Bridge's senior debt....
    [See lead-in story on 2/03/2001 below.]

2/13/2001  1 bankruptcy - 2/09/2001  3 bankruptcy/closure stories -
  1. Federated to close Stern's and rename or shut stores - Another chain falls to tough competition, by Leslie Kaufman, NYT, A24.
    ...Stern's, which was founded in 1867 in Manhattan, joins Bradlees and Montgomery Ward on the list of once-prominent department stores forced out of business after seeing their fortunes fall in the face of ferocious low-cost interlopers like Target and Kohl's.
    ["Forced out of business" - baloney! Afflicted with the worst, most unimaginative management in 134 years, more likely. A flexible Timesizing-based corporate design like that of Nucor Steel or Lincoln Electric would make any business unsinkable. Nucor has the last word in workweek and pay flexibility, and Lincoln has the last word in real teamplay = "everyone sacrifices together, starting at the top."]

  2. Icebox calling it quits, by Amy Harmon, NYT, C4.
    ...The Los Angeles-based Internet company that produced some of the most popular animated entertainment on the Web is shutting down today....unable to raise the $10m it needed to reach profitability.... The year-old concern, which had 106 employees at its height...is one of a string of Internet companies that have gone under in recent months.....
    [See also today's downsizings.]

  3. Web layoffs galore, but many find a net, by Jayson Blair [=‘Times reporter who resigned leaves long trail of deception,’ 5/11/2003 NYT, A1], NYT, A25.
    ...GoRefer.com, an online marketing concern, [is] going out of business....
    [See also today's downsizings.]

2/08/2001  2 bankruptcy stories -
  1. GS Industries, a maker of steel rods, seeks protection, Bloomberg via NYT, C4.
    ...a result of increased competition and higher energy costs..\.. North America's largest producer of steel wire rod [will] close its plant in Kansas City, Mo. [and] cut by about half the production of the closely held company...based in Charlotte, NC...
    [See also today's downsizings.]

  2. Bankruptcy bill needs revision, key Democrat says - Impact on women, children questioned, AP via Boston Globe, C2.
    WASHINGTON - Democratic opponents are willing to compromise on a bill making it harder for people to erase their debts in bankruptcy court, but it should be revised to help women and children owed support from bankrupt fathers...Rep. John Conyers of Michigan, the House Judiciary Committee's senior Democrat, said at a hearing....
    [This is the same Conyers of the Dellum-Conyers 35-hour workweek bill of 1997.]

2/07/2001  1 bankruptcy mentioned - 2/06/2001  2 bankruptcies/closures mentioned -
  1. eToys to lay off its remaining workers, by Matt Richtel, NYT, C8.
    SAN FRANCISCO- ...The once high-flying Internet toy retailer [will] lay off its 293 remaining employees and shut its doors on April 6, barring an 11th-hour rescue in the form of a large investor or a strategic partner....

  2. Voter.com pulls plug, fires 45 - Despite millions of users, Web site found no profit in politics, by Ross Kerber, Boston Globe, D1.
    ...Managers and investors decided to shut down operations..\..ending one of the most heavily promoted attempts to find an audience for public discourse online...after failing to find new investors for the site's mix of news, chat boards, legislative data, and campaign ads....

2/04/2001  1 weekend bankruptcy mentioned, with $105m debt - 2/03/2001  2 bankruptcies/closures mentioned -
  1. Petopia.com withdraws public offering and closes, Reuters via NYT, B3.
    ...An online pet products retailer whose backers included Petco Animal Supplies and NBC, a unit of General Electric, withdrew plans to go public yesterday, saying it has sold most of its assets to Petco and was no longer in business. Petopia, which is based in San Francisco, announced...that it was withdrawing a $100m IPO [that] the company was planning to use...to repay $2m in debt as well as for marketing expansion and brand-building efforts.

  2. Bridge Information faces involuntary bankruptcy, AP via NYT, B3.
    Saying that talks had failed to restructure financing for Bridge Information Systems, a provider of financial news and data, Highland Capital, an investment firm in Dallas and a minority investor in Bridge, has broken ranks with other creditors and has filed a bankruptcy petition...that calls for liquidation of the company.
    [Finally did it! - on 2/15 reported on 2/16/2001 above.]

1/27/2001  1 bankruptcy mentioned - 1/25/2001  2 bankruptcies mentioned -
  1. Medical equipment rental company seeks Chapter 11, Bloomberg via NYT, C4.
    Mediq, which rents medical equipment to nursing homes and more than 5,000 hospitals, has filed...after it missed interest payments. In papers filed yesterday...in Delaware, the company...based in Pennsauken, NJ listed $3.07m in assets and $120.4m in debts [yielding red $117.33m]. Mediq, bought by Bruckman, Rosser, Sherrill & Co. investment firm in 1998, cut more than 250 jobs last year.
    [The Big Lethal - takeover, downsizing, bankruptcy.]

  2. Pseudo.com, failed online TV network, is sold for fraction of what it spent [$2m, to INTV], by Jayson Blair [=‘Times reporter who resigned leaves long trail of deception,’ 5/11/2003 NYT, A1], NYT, A23. The remnants of Pseudo.com, the online TV network...that produced TV programming for the Web \and\ that filed for bankruptcy protection last fall after investors refused to give it more money, were acquired yesterday by INTV, a New York Internet company, for $2m....

1/23/2001  1 general & 2 specific bankruptcy stories -
  1. Gramm backs new bankruptcy bill, AP via Boston Globe, D2.
    Senate Banking Committee chairman Phil Gramm, a Texas Republican...plans to send Pres. Bush a new bankruptcy overhaul bill that would make it harder for people to erase their debts in court. Congress overwhelmingly passed a similar bill last year, but it was vetoed by Pres. Clinton, who said it was unfair to ordinary debtors and working families who fall on hard times....
    [Another hard-learned lesson of the Great Depression about to be unlearned. Compare the "old-fashioned" Glass-Steagall Banking Bill that separated brokerages, insurance companies and banks - now repealed. Compare the end of "bucket shops" and the beginning of "single stock futures."...]

  2. Converse [Inc.] files Chapter 11; will move production to Asia, AP via NYT, C4.
    The sneaker maker...plans to close its three North American production plants...and shift production to Asia.... The 97-year-old company...plans to close plants in Lumberton NC, Mission TX, and Reynosa MEX by April.... The company had over $183m in debt in July.

  3. Airline in bankruptcy says new money has not arrived, Bloomberg via NYT, C4.
    Legend Airlines Inc., a start-up carrier that filed for Chapter 11 bankruptcy last month [story 1/03] said a group that pledged $20m to help it restart operations did not provide the funds as promised yesterday....

  4. Loews Cineplex mulls bankruptcy, Reuters via Boston Globe, D2.
    ...The number two US movie theater operator...plans to shut about 675, or about 23% of its 2,965 screens in the US and Canada, and...may file for bankruptcy protection. The New York company...also reported a Q3 loss up nearly eightfold from a year ago [$23.8m]....
    [Finally did it! - on 2/15 reported on 2/16/2001 above.]

1/20/2001  1 general & 2 specific failures -
  1. Business failures climb in Japan, NYT, B2.
    Bankruptcies climbed last month to the 2nd-highest level since the collapse of the bubble economy in 1989 and, given the bleak outlook for the Japanese economy and financial system, insolvency is likely to continue apace. Although there have been more bankruptcies in previous years, the amount of debt held by bankrupt businesses last year reached the highest level since World War II...23.99T yen or $205B.... A record 12 listed companies failed last year..\.. The vast majority of companies that file for bankruptcy protection in Japan will liquidate, but...a rising number of...major corporations are likely to go through a reorg instead.
    The figures would have been worse but for an intense campaign by banks to waive the debts of major - and politically well-connected - corporations like Daiel Inc., Kumagai Gumi and others....

  2. A Czech Internet venture will close, by Peter Green, NYT, B2.
    PRAGUE... - Globopolis.com, a company...that produces online city guides is going out of business as the shakeout in Internet start-ups reaches into Eastern Europe. ...Revenues at the year-old operation could not meet the rapidly growing costs of its four-city, 90-person operation....
    [See also today's downsizings.]

  3. Magazine to cease publication, by Larry Tye, Boston Globe, F1.
    The next issue of the health magazine Hippocrates will be its last.... The magazine, acquired from Time-Life Inc., targeted consumers when it was launched 10 years ago. ..\..The Massachusetts Medical Society...reoriented it to doctors. ..\..The 130,000-circulation Hippocrates did not find a fertile audience among the primary-care physicians to whom it was targeted....
    [See also today's downsizings.]

1/19/2001  2 bankruptcy/closure mentions -
  1. Sunbeam in talks with lenders about $1.7B debt, Bloomberg via NYT, C3.
    ...The heavily indebted small-appliance maker [ruined by moron Albert "Chainsaw" Dunlap] confirmed yesterday that the company was in talks with its lenders but refused to comment on speculation by analysts that the company would soon file for Chapter 11.... The company's financial condition has worsened because of sluggish holiday sales....

  2. Retrenchment at CMGi, by Saul Hansell, NYT, C3.
    ...CMGi also said it would close ExchangePath, an Internet payments company....

1/18/2001  4 bankruptcy/liquidation mentions -
  1. NorthPoint [Communications] files for bankruptcy, AP via Boston Globe, D2.
    ...provider of high-speed Internet access... blaming...last year's canceled merger with Verizon....
    [See also today's downsizings.]

  2. LetsBuyIt.com in bankruptcy, Bloomberg via NYT, NYT, W1.
    ...Dutch Internet retailer...filed for full-scale bankruptcy proceedings...ran out of cash without finding a way to wring a profit from its service [which was similar to Priceline.com]. Analysts called it the biggest European e-commerce failure so far.

1/17/2001  4 bankruptcy/liquidation mentions -
  1. California on the brink, pointer summary (to A14), NYT, front page.
    California narrowly escaped statewide power blackouts for the second time in a week as big utilities moved closer to bankruptcy.
    [This is the whining morons at Pacific Gas & Electric and Southern California Edison again. They're giving the whole world an object lesson in how deregulation is always, automatically, so much better than regulation. Basically, California and other states have ignored some good old-fashioned advice - "If it works, don't fix it." They're trying to fix something that worked. And guess what. Now in Calif. they broke it and put their whole Silicon Valley at risk. Basically throughout the American economy, we just can't afford to go on subsidizing the astronomical and unlimited pay of the few. Check out the story on the right side of the page - "Stadium building boom bypasses New York," by Richard Sandomir. Well, isn't that too bad. Like us taxpayers are all supposed to pitch in and finance stadiums for these poor little rich boys in big league sports. Right. There is no limit to their greed or their gall.]

  2. [And joining these big babies on the front page today, we have...Chiquita Banana! -]
    Citing European banana quotas, Chiquita says bankruptcy looms, by Anthony DePalma, NYT, front page.
    Chiquita Brands International, the largest producer of bananas in the world and a household name in the U.S. says it cannot pay its debts and will probably have to go into bankruptcy court because the Clinton administration has not been able to force the European Union to trade freely and fairly.... [Ah, you only get one of those and we think you want only "freely," Anthony - we're sure the EU is probably being very fair to banana growers besides Chiquita, who is already the biggest in the world and seems to be looking for a monopoly on the strength of its being a household name in America (and therefore, we suppose, practically an American Patriotic Institution alias Great Candidate for Corporate Welfare. We suggest cutting Chiquita top executive pay.]
    Chiquita contends that European quotas against bananas grown in Latin America, as Chiquita's are, have cost the company $200m a year since 1992 and staggered the 131-year-old grower.
    [Then how come they're still the "largest producers of bananas in the world"? God, what whiners!]
    The financial hardships of one of the nation's biggest and oldest companies - a company with a storied and at times unsavory past in Central America - underscore the escalating importance to the United States economy of keeping markets open....
    [Oh sure, when it's in our self-interest, but not otherwise. Chiquita is probably the big whining baby that pressured us into all kinds of meddlesome "situations" in Central America, supporting dictatorships, etc. Oh yeah, here it is -]
    Under steady pressure from Chiquita, whose chairman and chief executive, Carl H. Linder, is a big contributor to both political parties, the Clinton administration brought several complaints against the European Union in the late 1990's before the World Trade Organization and won them....
    [Well, Carl, maybe it's time to saved some of the megabucks you've been using to corrupt American politics and used it to pay off your debts. You call yourself a capitalist? You're nothing but a "poor little richboy," spoiled as hell, expecting the whole trade and foreign policy of the nation to revolve around you. Our heart goes out to you in your throbbing victimhood (and our stomach turns). Time to retire and go off and pout. And here "the other shoe" drops, well, not quite -]
    Chiquita plan, Bloomberg via 11/13/2001 BG, D2.
    Chiquita Brands International Inc. of Cincinnati...said it will file for Chapter 11 bankruptcy protection. The biggest banana producer said it has negotiated a plan with creditors to repay about $861m in debt that accumulated as Chiquita's share of the 15-nation EU market fell to 20% from 40%.
    [Lordy, Chiquita's taking longer to die than a Beethoven symphony. Here at last is the filing, we hope -]
    Chiquita files for Chapter 11 protection, AP via 11/29/2001 NYT, C4.
    Chiquita Brands International filed yesterday for Chapter 11....
    [Phew, glad that's over! Oops, there's more -]
    Chiquita, fresh out of bankruptcy, issues new stock, AP via 3/20/2002 NYT, C4.
    [Followup]
    Second period saw first profit since Chapter 11 restructuring, Dow Jones via 7/31/2002 WSJ, B9.
    Chiquita Brands International swung to a profit in the second quarter....

  3. [And here's another big baby -]
    Largest U.S. sugar producer files Chapter 11, Bloomberg via NYT, C3.
    The Imperial Sugar Co., the largest sugar producer in the United States, filed for...bankruptcy court protection from creditors yesterday, listing $1.09B in assets and $775m in debt.
    [And what, pray tell, is the matter with that?]
    ...The company cited a glut of refined sugar, low prices and high energy costs as the causes of widening losses in the domestic sugar industry.
    [Again, how about cutting top executive pay. It's not like all this was unforeseeable.]

  4. Pets.com holders approve liquidation, Bloomberg via NYT, C3.
    Shareholders of Pets.com Inc. have approved a plan to sell the company's assets as the former online retailer of pet supplies shuts down. The company announced on Nov. 7 that it was closing.

1/16/2001  2-in-1 bankruptcy mention - 1/14/2001  1 weekend bankruptcy mention, in the Travel Section - 1/12/2001  2 bankruptcy mentions -
  1. Waste Systems [International] files for protection under Chapter 11, Dow Jones via NYT, C3.
    ...A trash disposal and recycling company based in Lexington MA filed...yesterday for itself and 30 units.... Last week...it...defaulted under its senior bank debt and...missed an interest payment on its subordinated notes. It [will] not make a coming payment on its senior notes....

  2. American Homestar seeks protection under Chapter 11,
    NYT, C3.
    ...A maker of prefabricated homes filed...citing a "severe and prolonged decline" in sales and its debts from a spate of acquisitions.
    [We've frequently mentioned the lethal takeover-downsizing connection. This is our first explicit case of the toxic takeover-bankruptcy connection. We expect more.]
    The company, based in League City TX, filed in Houston for itself and for 21 subsidiaries. [It] closed plants in 1Q00 and 3Q00 and renegotiated some bond debt in October. Separately, a competitor, Clayton Homes of Maryville TN, [will] cut back production at its 20 plants...because of weak sales.
    [By disastrous downsizing or cushioning timesizing?? No information provided.]

1/11/2001  1 bankruptcy mention - 1/10/2001  4 liquidation mentions -
  1. TWA to accept AMR buyout, AP via Boston Globe, D2.
    ST. LOUIS - Trans World Airlines will announce today...at 9 am in New York..\..its plans to file for Chapter 11 bankruptcy protection and accept a buyout by AMR Corp.'s American Airlines.... TWA CEO Bill Compton...promised American would keep all of the airline's union employees and that St. Louis would remain a hub.... American will pay TWA $500m and assume about $3B of aircraft operating losses. TWA would attempt to file for Chapter 11 bankruptcy late last night or today, the WSJ reported....
    [See also today's downsizings.]

  2. Send.com can't hang on, to shut operations, by Stephanie Stoughton, Boston Globe, D3.
    ...Yesterday, the Waltham \Ma.\ online gift seller...known for its advertisements featuring the tasteful Giver...acknowledged that it could no longer overcome the harsh market realities that have punished even larger virtual players such as eToys Inc. Send.com is now shutting down its operations and bidding farewell to 82 employees....
    [See also today's downsizings.]

  3. Dumbfounded by dot-com's demise - MutualFunds.com seemed to have it all together - but too late, Beth Healy, Boston Globe, D1.
    ...Launched in Dec., 1999, when the stock market and the Internet were still flying high, the Boston-based company flamed out within nine months. By September, it had raced through $3m in venture financing, laid off all 24 employees, and put its domain name on the auction block. Four months later, there are still no takers....
    [See also today's downsizings.]

  4. Investment group ordered to close, by Scott Nelson, Boston Globe, D7.
    Secretary of State Wm. F. Galvin issued a cease-and-desist order against Waltham-based Grumpalumpa Investment Group, fined its founder Paul Ciraso of Waltham $10,000, and ordered him to refund Mass. investors' money.... Galvin said [Grumpalumpa's Web] site was a pyramid scheme....

1/09/2001  2 liquidation mentions -
  1. Net firms announce layoffs, bankruptcies, by Beth Healy, Boston Globe, D6.
    ...Two start-ups announced they were seeking Chapter 7 bankruptcy protection and going out of business: [for example,] e7th.com, a b2b [business to business] site for the fashion industry....

  2. Net firms announce layoffs, bankruptcies, by Beth Healy, Boston Globe, D6.
    ...Two start-ups announced they were seeking Chapter 7 bankruptcy protection and going out of business: [for example,] Foodline.com, an online restaurant reservation system.... Ambrosia on Huntingdon, which participated in the test of Foodline's system, saw a couple come in during a sold-out New Year's Eve event, unaware a Web reservation they placed had died in cyberspace. "The technology wasn't there yet," said Gary Fenske, director of operations at the tony restaurant....

1/06/2001  3 bankruptcy/liquidation stories -
  1. Corporate raider seeks bankruptcy again, AP via NYT, B2.
    Paul Bilzerian, a former corporate raider who became known for using bankruptcy to keep a mansion while walking away from $300m in debts, has filed for bankruptcy again. Six months ago, a Tampa bankruptcy judge had closed a 1991 case filed by Mr. Bilzerian, who paid $400,000 to settle claims of $300,000,000.
    In a new filing, Mr. Bilzerian is claiming $140,000,000 in debts and [only] $15,805 in assets....
    [So this time he's only got 140m-15805= $139,984,195 in debt. Whatzamatta with this shyster - he's not even gypping people of half the amount he did before! He's losing his parasitic efficiency! What a disgrace to the Armenian community. Maybe some of the pillars of that community should take him aside and have a little talk with him.]
    Not included in those assets, nor in the previous filing, is his 37,000-sq-ft, $5,000,000 mansion north of Tampa. Under Florida law, one's "home" [our quotes -ed.] is protected from being sold to pay off creditors.
    Judith Staff, asst. chief litigation counsel at the SEC said she believed the latest bankruptcy was [also] Mr. Bilzerian's attempt to shield his property. The SEC is seeking to have Mr. Bilzerian's property liquidated to settle a $62,000,000 judgment against him in a civil lawsuit.

  2. Belgian software maker to cut work force by 20%, Reuters via NYT, B3.
    BRUSSELS...- The troubled Belgian software company, Lernout & Hauspie Speech Products said [yester]day...a court in its hometown of Ieper in West Flanders granted [it] conditional protection from bankruptcy for 6 months. The concordat protection, which has some similarities to Chapter 11...in the U.S., applies to both Lernout & Hauspie and its recently acquired American subsidiary the Dictaphone Corp....
    "Having been granted a concordat, L&H now has sufficient legal protection to implement a recovery plan for the company"..\..said John H. Duerden, the recently appointed president.... "The court will follow the company day by day during the 6 months," he said....
    [See also the L&H item under today's downsizings.]

  3. G-I Holdings Inc., NYT, B3.
    ...Wayne, NJ, a privately owned holding company and the owner of GAF Corp., a buildings material and specialty chemicals manufacturer, has filed for bankruptcy protection to resolve pending asbestos liability claims.

1/05/2001  4 bankruptcy/liquidation stories -
  1. George Magazine to cease publication, by Alex Kuczynski, NYT, C3.
    George, the magazine founded by John F. Kennedy Jr. that combined politics and celebrity...will cease publication with the March issue.... Mr. Kennedy died in a plane accident in July 1999, which put [his] magazine at the center of a media frenzy.
    [Oh how classy - "cease publication." And this article sure strains to repeat the "Kennedy" name as often as possible, regardless of grammatical need. Too bad the magazine didn't do that. Instead of dragging George Washington into it, they should have just called the whole mag "Kennedy" or even, "JohnJohn" and cut to the chase.]
    After [his] death, circulation jumped sharply - by 148.3% on average for the last 6 months of 1999.... Overall circulation increased by 38%. But that turnaround on the newsstand turned out to be largely fueled by lugubrious public interest in Mr. Kennedy's posthumous publication, and the consumer voyeurism has since abated significantly.
    [Still, how could you blow that kind of advantage?!]
    Circulation overall was up 13.8% for the first 6 months of 2000...while newsstand circulation was down 8.1% for the period.
    [So just keep running naked pictures of JohnJohn and lugubrious voyoeuristic KennedyKennedyKennedy articles! For gawdsake, how much graymatter does it take to figure that out?!]
    Despite the briefly optimistic circulation growth, the magazine's financial outlook remained shaky.
    [Then cut executive pay.]
    In 1999, the magazine had lost about $8m for Hachette...
    [How in the world could it do that if circulation was up 148% and somebody had a $2 calculator?]
    ...and Hachette later that year paid $10m to the Kennedy family for its 50% stake in the magazine.
    [Looks like the Kennedy's made out anyway. But why would Hachette be so stupid if they were already losing millions? Somebody at Hachette must have had a hatchet in their brain. (You saw that coming, right?)]
    In 2000, the magazine lost close to $10m, a Hachette executive said.
    [Shouldn't that be "an Hachette executive..."?]
    Advertising did not come easily to the magazine, which in its last year resorted to printing ads for baldness cures.
    [It ain't what you print, but how you print it.]
    For the period from Jan. thru Nov., ad pages were down 40%, to 251 from 419 pages for the period the year before, according to the Publishers Information Bureau.
    [Then put everybody on ad-sucking alternate days! Here's the real problem -]
    When Mr. Kennedy first agreed to be a partner with Hachette in publishing the magazine, he shied away from using his image on every cover, as Hachette had first requested, asserting that would be exploiting his fame too much.
    [There's the problem. Double-mindedness. JohnJohn (a chunk of 20/20 hindsight cum armchair quarterbacking here) SHOULD have eschewed the vulgar nudity, played up the latent American hunger for royalty, and provided a classy glimpse into the Kennedy compound today and the Kennedy White House yesterday. Instead...]
    But later, Mr. Kennedy did resort to various promotional efforts. In the Sept/97 issue, he posed nude in the magazine, looking tempted by an apple dangling from a tree.
    [The Kennedy's never really had the class, intelligence or education to pull off a trip to the gutter like this. Now if he had realized that they didn't have apples in the Fertile Crescent in 4004 BC and pictured a likelier quince instead (and an egalitarian explanation within), if they had played up the Adam-Eve thing and had whatshername's silhouette in the background, if they'd had a very small asp somewhere near the quince..., people might have connected the whole thing up with the "Kennedy Curse" instead of wondering why one of the Princes of the American Monarchy had to strip to his starkers for business. Recall old Joseph Sr.'s concept of establishing his family as an exclusive private club (though he himself served the concept best from behind the arras, after he blew away his own credibility for public service by boohooing on the LD fone to FDR - you can still FDR's brain going "get this flake out of the ambassador's mansion & get me a pokerface in there fast!"). Then the clincher -]
    The spread was accompanied by an editor's letter remonstrating his cousins Joseph and Michael Kennedy as "poster boys for bad behavior."
    [Yeah, like "look who's talking'!" Ah, fame - fame is wasted on the famous, as wealth is wasted on the rich and youth is wasted on the young. And ohgawd, the George cover they show in the article looks vaguely like Princess Di, who would have been OK, but turns out to be - yukkkkk - Linda Tripp after her looong trip thru plastic surgery. George is going into a well-deserved RIP - dying for lack of what it most promised, CC & ginger - CC being Cool and Class.]

  2. Court OK's Bradlees liquidation plan, by Chris Reidy, Boston Globe, D7.
    ...the approval of a bankruptcy court in New York...under [which] Bradlees can sell its inventory to a consortium of liquidators led by Gordon Bros. Retail Partners LLC of Boston.
    [How can they be 'LLC' in the US? Isn't that European? Anyway, so far so good. Now the bad part -]
    Bradlees said the court also approved a severance payment to some of its top executives.
    [See yesterday, item 2. Funny how when anybody suggests helping the poor in America, it's dependency-fostering incentive-dampening socialism (oh nooooo!) but helping the rich who don't need it is standard operating procedure. No wonder we have periodic crises of under-consumption, that we can no longer refer to as depressions because FDR decreed that he solved the 'depression to end all depressions' - even tho he just handed out the feelgood bandaids till the War came along and really solved it. We have a much better way.]

  3. [But speaking of messup-motivating rewards -]
    The $10m failure, by Steve Bailey, Boston Globe, D1.
    Don't spend those millions yet, Kerner Smith. Several months ago I threw a hissy fit in this space because Stone& Webster's former boss was in line to collect a rich golden parachute. This, after all, was the man who had played a key role in killing off the old-line Boston engineering firm that had built everything from the MIT campus [good] to many of the nation's nuclear plants [oh nooooooo].
    As it turns out, I and a lot of former Stone & Websterites who are now on the street weren't the only ones upset. As it turns out, people with a lot more clout - [the ones] who write the checks...- were even more upset. The Shaw Group...that bought the Stone&Webster corpse in July has filed suit against [Kerner] Smith, saying it owes nothing to the CEO "who ran [the company] right into bankruptcy"....

  4. Mercata [Inc.] is latest online casualty, Bloomberg via NYT, C4.
    ...An online merchandise auctioneer that is majority owned by the Microsoft co-founder Paul Allen's Vulcan Ventures [is] closing its doors after failing to raise more money. Mercata.com [is] its website where consumers can team up to buy specially advertised products at a discount and bid on products to make the price cheaper....
    [How original. Wasn't this exactly the PriceLine formula? How do such copycats justify their existence?]
    News of the closing came a day after Mercata canceled a $100m IPO.
    [These guys must have just popped out of deep denial. See also today's downsizings.]

  5. Resignations at LetsBuyIt, AP via NYT, W1.
    The entire mgmt board...including CEO Martin Coles resigned yesterday, after the company's Dec. 29 filing for temporary bankruptcy-court protection in the Netherlands....
    [Like rats leaving a sinking ship. Well, this should make it permanent.]

1/04/2001  5 bankruptcy/liquidation stories -
  1. At least 210 Internet companies folded last year, report finds, Reuters 06:30 01-03-01 via AOLNews via RadioTony.
    ...taking down with them $1.5B in investment money....
    [Is that all?]
    The study, from San Francisco-based Webmergers.com, said the rate of failure accelerated at year end, with 60% of the closures occurring in the fourth quarter. Most of the companies [109]...were e-commerce businesses.... Online content sites made up another 30...while infrastructure and other online service companies made up the remainder.
    Webmergers estimates that as many as 15,000 employees lost their jobs as a result of the closings. That figure does not include all the dot-com layoffs, since many companies that are still in business have slashed their payrolls to conserve cash. ...Some of the companies that closed their doors just before year end include BizBuyer.com [see 12/28/200 below] and DeskTop.com.

  2. Bradless chief seeks $2.3m in severance for executives, by Chris Reidy, Boston Globe, C5.
    ...to be distributed among 11 top executives. The request does not include chief executive Peter Thorner [himself] who could receive as much as $6m.... Those amounts contrast with the $13.1m in severance that may be divided up among the roughly 7,300 employees who work in the chain's 105 discount department stores. Last week, the Braintree MA-based chain announced plans to go out of business. The company employs a total of 9,800 workers....
    [So let's see. One guy gets $6,000,000. The next 11 guys get an average of $210,000 apiece. And so far, these are the people who decided it would be groovy to go out of business so they could collect. Then the next 7300 people get an average of $1,800 apiece, whoopydoo. And the last 9800-1-11-7300 = 2,488 people get nothing. That's the primitive state of what we currently euphemistically call our economy. "A house divided against itself cannot stand."]

  3. Musicmaker.com seeks OK to close, Bloomberg via Boston Globe, C2.
    ...[A firm that] allows music fans to make customized compact discs online decided to shut down and sell its assets because it is unable to compete against rival free services such as Napster Inc. Musicmaker.com will seek shareholder approval to sell its assets after it finds a buyer willing to purchase the money-losing business for more than $32m, about the amount of cash it had at the end of Q3....

  4. Court to rule on Lernout & Hauspie, APvia Boston Globe, C2.
    After hearing final arguments from credtiors and company lawyers, a Belgian court will rule in two days time on whether to grant bankruptcy protection to the speech technology firm....

  5. Government aid for Hyundai, Bloomberg via Boston Globe, W1.
    The South Korean government is stepping in [to the tune of 2.1+1.2 = $3.3B] to help refinance bonds issued by two giant companies in the Hyundai group that can no longer borrow from commercial banks....
    [They'll be saaaaahr-ryyy! This is "sending good money after bad."]

1/03/2001  3 bankruptcy/liquidation stories -
  1. Shares plunge after dot-com seeks protection, Bloomberg via NYT, C4.
    LetsBuyIt.com N.V. [is] the Dutch Internet company that was granted temporary bankruptcy court protection from creditors in the Netherlands just before the new year.... The company's website tries to save customers money by aggregating their purchases to win volume discounts, and to profit by displaying advertising to users. The CEO, Martin Coles, said the company might file for similar protection in other countries as well....
    [Here we see the fundamental contradiction of our current frozen-workweek economy - dot-coms try to attract customers by saving them money - and wasting their time with display ads. The dot-coms tried to lay a whole new level of unnecessary activity on people, and convince us all that it was necessary, that we "needed" it, and them, - but we didn't and don't - because when CEOs have not automatically reduced working hours per person as more and more activities get automated, when they have rather demanded more, not less, "face time," who in the world has time to fool around with slow-loading Internet sites that take up your non-existent extra time with gratuitous advertising for gratuitous products and services that you neither need nor have time for?! In 1992 the word was, "It's the economy, stupid!" In 2001, it's getting clearer and clearer that "It's the time crunch, stupid!" (See also our following story.)]

  2. Now, not playing - Video rental store closings reflect ailing industry, by Chris Reidy, Boston Globe, C1.
    Videosmith and West Coast Video are chains either owned or managed by Video City Inc., a Philadelphia-based company that filed for bankruptcy protection in August.... Today the Internet is competing with video rentals for consumers' leisure time.
    [What leisure time? Downsizing workforces and upsized workweeks of the survivors means less leisure and more pressure on all the leisure industries. Now there's a natural ally for the shorter-worktime movement, besides the religious community - the leisure industries. (Or you might say that the religious community is now functioning as a leisure industry - for example, *freeourtime.org.)]
    "If you're spending a lot of time on the Internet, that's 10 or 12 hours a week you're not renting videos," said Barry Glovsky, owner of Video Department Set-Ups, a Newton MA distributor to about 300 video stores in New England.
    [So much for the strained argument of economists who criticize the shorter-hours approach as guilty of the "lump of employment theory" (which they call the "lump of labor fallacy" in a double misspeak). The position of shorter-hours advocates is that their call to share the available market-demanded work here and now is the obvious finitude of everyone's time. "You only have 24 hours in the day." And if you don't sleep 8 of them, you're cutting your life expectancy.]
    A strong economy isn't helping, either. When consumers have money, they spend freely, dining at swank restaurants or catching "Swan Lake" or a Bruins hockey game. Cheap entertainment, such as renting videos, becomes a lower priority.
    "What we need is a recession," half-joked Glovsky, who noted that some of the most successful video stores are located in blue-collar neighborhoods during times of high unemployment....
    ["Be careful what you wish for," because that's exactly what we'll get if Greenspan's half-point ratecut tomorrow - or any ratecut - can no longer offset the astronomical degree of funnelling and fossilizing of income and wealth that this economy has reached.]

  3. Legend to resume some service, pointer digest (to C8), NYT, C1.
    Legend Airlines, which offered 1st-class service at coach prices for fliers to and from Dallas until it was forced into bankruptcy, has found new investors and plans to resume service to New York and Washington....

For earlier bankruptcy stories, click on the desired date -

  • Dec/2000.
  • Oct-Nov/00.
  • Jul-Sep/00.
  • Jan-Jun/2000.
  • Aug-Dec/1999.
  • 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.


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