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[Commentary] © 2002 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Bankruptcies, Apr-Jun/2002


6/27/2002  1 bankruptcy, with $258.1m in debt, in NY Times (NYT) & BG -

6/26/2002  1 bankruptcy, in NY Times (NYT) & BG - 6/21/2002  1 bankruptcy, in NY Times (NYT) & BG - 6/20/2002  1 bankruptcy, in NY Times (NYT) & BG - 6/17/2002  1 bankruptcy, with $5.1B debt, in NY Times (NYT) & BG - 6/15/2002  1 bankruptcy story, in NY Times (NYT) & BG - 6/13/2002  1 bankruptcy, totaling $?? debt, in NY Times (NYT) & BG - 6/12/2002  3-in-1 bankruptcies, totaling $?? debt, in NY Times (NYT) & BG - 6/11/2002  2 bankruptcies, totaling $?? debt, in NY Times (NYT) & BG -
  1. Desa International Inc., NYT, C4.
    ...Bowling Green, Ky., a maker of space heaters and security equipment, filed for Chapter 11 bankruptcy protection and said it planned to sell the company by late September and continue operating with the same workers.

  2. Bankruptcy of a division may signal Adelphia's fall, by Geraldine Fabrikant, NYT, C1.
    ...The Chapter 11 filing [yesterday], by Adelphia's Century Communications unit, was widely seen as a precursor to a bankruptcy filing within days by Adelphia itself [which] is in default on $7B in loans.... Adelphia acquired [Century] for nearly $5B in 1999....
    [Again, the lethal takeover-bankruptcy connection.]

6/05/2002  1 bankruptcy, totaling $307.4m debt, in NY Times (NYT) & BG - 6/04/2002  2 more bankruptcies, totaling $307.4m debt, in NY Times (NYT) & BG -
  1. Birmingham Steel files for Chapter 11 protection, Bloomberg via NYT, C4.
    ...Make[r of] concrete reinforcing bars for the construction industry, sought bankruptcy protection from creditors to complete its sale to the Nucor Corp.
    [Nucor Steel is one of our two major working models of timesizing. Hope this acquisition doesn't damage them like Lincoln Electric's adventuring in South America.]
    Birmingham Steel listed $475.5m in assets and $681.9m in debts in Ch. 11 papers filed in...Wilmington, Del.
    [That means a net debt of $206.4m.]
    The company, which is based in Birmingham, Ala., has had nine consecutive quarterly losses because of low prices caused by falling demand and competition from imports. It is the 8th steel maker to file for bankruptcy protection during the last year.
    [And there were 4700 zillion of 'em busted before that.]

  2. Napster files for bankruptcy, by Matt Richtel, NYT, C9.
    ...Operat[or of] a music file-sharing service that was once among the fastest-growing features on the Internet, filed for Chapter 11 bankruptcy protection yesterday...on the heels of [its] reaching a deal to sell its remaining assets to Bertelsmann, the German media conglomerate. In its filings, Napster said it had $101m in outstanding liabilities.... The record companies have sued Napster, accusing it of copyright infringement....
    [The perfect "new economy" company - make a big splash by selling other people's stuff, ie: stealing, or lying (all of them, especially the auditors) and then crash dramatically. Ah, the once-great US of A takes on more and more earmarks of a big 3rd-world has-been. The concentration of wealth and the income gap go off the charts and everybody thinks, They're crooks and they're rich - why not me? Check out all the stories on sleazebag Kozlowski's ouster today, which we predicted years ago cuz the SOB can't manage, just merge - "Tyco chief out; Inquiry focuses on tax on art," by Alex Berenson, NYT, front page, and "A prime example of anything-goes executive pay - At the top of Tyco, the limit is pushed to the very edge," by David Leonhardt, NYT, C1, and "Well compensated - As CEO of Tyco International, L. Dennis Kozlowski was one of the best-paid executives in the country," chart, NYT, C1. This is the kind of thing that is going to move us along from balancing the fundamental time dimension with timesizing, to applying the 5 phases to the Next Big Thing, income. This degree of income concentration easily gets dangerous. All it takes is an American rich guy who joins the Dark Side - an American Bin Laden with a nice mainstream American WASP name and face. Then maybe we'll realize how stupid it is to restrain laughter at arguments like, "The rich should get the most tax cuts cuz they pay the most taxes."]
    [Followup]
    Judge issues injunction against Madster, by Matt Richtel, 9/05/2002 NYT, C2.
    ...Yesterday, a trustee for Napster filed to convert its bankruptcy to Chapter 7 from Chapter 11; a company liquidates its assets under Chapter 7, while Chapter 11 allows a company to reorganize. The company's demise, meanwhile, appeared to be complete: the website of Napster, once the Internet's fastest-growing service, read only "Napster was here."
    [Followup 2]
    Napster nears sale of assets, avoids Chapter 7 closure, 9/30/2002 WSJ, B6.

6/01/2002  2 bankruptcies with $800m+?? debt & 1 nation-level bankruptcy allusion, in NY Times (NYT) & BG -
  1. World Kitchen Inc., NYT, B4.
    ...a housewares company owned by Kohlberg Kravis Roberts & Co., NYC, an investment bank, filed for Chapter 11...after struggling with $800m in debt and said it planned to maintain normal operations during the reorganizing process.

  2. Farmland Industries in bankruptcy after rejecting Smithfield Foods bid, Bloomberg via NYT, B4.
    ...The nation's largest farm cooperative filed...under Chapter 11..\..after failing to win a reprieve from lenders and rejecting a takeover bid...and plans to shed jobs, sell assets and reduce debt..\..
    [Unspecified debt.  Strikes us that it must take sustained bad management to bankrupt (A) a farm cooperative in an age of (B) farm subsidies. Maybe the clue is in this sentence -]
    The cooperative, which is based in Kansas City, Mo., has already sold its domestic grain business and closed its international trading unit to cut costs and pay interest on its debt after a 4-year slump in demand for fertilizer, seeds and fuel it sells to its 600,000 members.
    [Never mind a predictable "slump in demand" from its own members - what's up with that "international trading unit"??]
    [Followup -]
  3. Farmland investors lose bid to form bankruptcy panel, Bloomberg via 9/27/2002 NYT, C2.
    KANSAS CITY, Mo...- Shareholders of Farmland Industries [yester]day lost a bid to form a committee to represent their interests as Farmland, the largest U.S. farm cooperative, reorganizes under bankruptcy protection. Judge Jerry Venters of US Bankruptcy Court rejected the request from the John Hancock Life Insurance Co, the Commerce Indemnity Co, the Erie Insurance Co and others which own preferred and common stock in Farmland, according to an order posted on the court's website. The order did not explain why the request was denied.
    [Probably didn't want to start a trend.]
    Creditors and lenders holding $1.47B in Farmland debt had objected to formation of the committee, saying it would slow the reorg, waste money and reduce funds available to creditors....

5/29/2002  1 economywide bankruptcy mention , in NY Times (NYT) & BG - 5/25/2002  1 bankruptcy, with $2.02B debt, mentioned in NY Times (NYT) & BG - 5/24/2002  1 bankruptcy, mentioned in NY Times (NYT) & BG - 5/22/2002  1 bankruptcy, with $670m debt, mentioned in NY Times (NYT) & BG (not counting general story, "Law professors express concern over pending bankruptcy bill - A compromise on home equity is called 'profoundly unfair'," by Philip Shenon, NYT, A22, which starts, "Dozens of law professors who are among the nation's leading bankruptcy specialists have told Congress that a pending bill to overhaul the bankruptcy system will lead to 'new headlines and new scandal' because it will continue to permit high-income debtors to shield multimillion-dollar houses from creditors.") - 5/21/2002  1 bankruptcy, mentioned in NY Times (NYT) & BG - 5/20/2002  1 bankruptcy, mentioned in NY Times (NYT) & BG (not counting "A quiet attack on women - The bankruptcy bill takes aim at mothers and children," op ed by Elizabeth Warren, NYT, A23) - 5/17/2002  1 bankruptcy story, mentioned in NY Times (NYT) & BG - 5/16/2002  1 bankruptcy, with $7.7B debt, mentioned in NY Times (NYT) & BG - 5/15/2002  1 bankruptcy, with $?? debt, mentioned in NY Times (NYT) & BG - 5/14/2002  1 bankruptcy, with $?? debt, mentioned in NY Times (NYT) & BG - 5/11/2002  1 bankruptcy, with $6.6B in debt, mentioned in NY Times (NYT) & BG - 5/10/2002  1 bankruptcy, with $42.4m in debt, mentioned in NY Times (NYT) & BG
(not counting this item, "Bankruptcy talks collapse on abortion issue - Scant hope for a bill making it harder to escape debts," by Philip Shenon, NYT, A20, referring to a provision in the bill that "would prohibit anti-abortion protesters from using the bankruptcy laws to escape debts incurred as a result of court fines or judgements stemming from violent protests at abortion clinics.") - 5/09/2002  1 bankruptcy, with $6.6B in debt, mentioned in NY Times (NYT) & BG - 5/02/2002  1 bankruptcy story, mentioned in NY Times (NYT) & BG - 4/24/2002  1 bankruptcy story, mentioned in NY Times (NYT) & BG - 4/16/2002  1 bankruptcy with $500m net debt, mentioned in NY Times (NYT) & BG - 4/15/2002  2 bankruptcies with $?? debt, mentioned in NY Times (NYT) & BG - S
  1. Paging company set to declare bankruptcy, Bloomberg via NYT, C2.
    Metrocall Inc. [the No. 2] paging-services provider, plans to...file for Chapter 11 bankruptcy protection from creditors later this month, the company said in a regulatory filing. Metrocall lost $612.8m in 2001, according to the company's annual report filed Friday with the SEC. ...Metrocall said it would...close a...number of its 30 stores.
    Metrocall, which serves about 5.4m customers and has not earned a profit since 1992, is the latest victim in an industry losing customers to cellular telephones and other devices.
    [Another rebuttal of the brainless chant of mainstream economists, "Technology creates more jobs than it destroys."]
    The number of one-way pager users in the U.S. fell to about 30m at the end of 2001 from about 50m in 1998, the Cellular Telecoms & Internet Assoc. reported.
    Metrocall's top 2 competitors are already in bankruptcy court.... Arch Wireless Inc., the biggest paging company, filed...in December [caught this one on 12/07/2001 #2], while [oops, didn't catch this one - so see #2 right below.]
    Motorola, which invented the one-way pocket pager five decades ago, said in December that it would stop making the devices this year.
    [Note right beside this article, good news in another recent bankruptcy, "Under fire, Kmart revises chief's pay," NYT, C2, which states, "After objections from a committee representing its scores of creditors...Kmart said that it was eliminating the $4m payment promised to..\..James B. Adamson, the board member who became chairman and CEO earlier this year...if the company emerged from Chapter 11...by July 31 of next year."]

  2. Paging company set to declare bankruptcy, Bloomberg via NYT, C2.
    ...WebLink Wireless Inc., the No. 3 [pager] company, filed last May....

4/09/2002  3 bankruptcies with $3.137B +?? debt, mentioned in NY Times (NYT) & BG -
  1. A filing makes Kirch bankruptcy official, by John Tagliabue, NYT, W1.
    After weeks of teetering on the brink, the core companies of the Kirch Group media empire filed for bankruptcy protection in Germany today, paving the way for banks that hold the bulk of Kirch's debt to reorganize its many activities.... Essentially, Kirch came down because it did not have the $3B it needed to make debt payments from now to October....

  2. Mpower Holding files for bankruptcy, Bloomberg via NYT, C8.
    ...An Internet service provider filed for bankruptcy protection from creditors to eliminate $583.4m in debt. The company, based in Pittsford, NY., listed assets of $490m and debts of $627m on its Chapter 11 petition filed in US Bankruptcy Court in Delaware. Mpower's Mpower Communications unit, which provides high-speed Internet access and telephone services to businesses, also sought bankruptcy protection....
    [490 up and 627 down gives us $137m net debt.]

  3. China: Toy factory closed, Reuters via NYT, C4.
    ...China Labor Watch, which is based in New York...said 1,500 workers were fired Saturday without their February or March wages \by\ the Shiuhe Electronics factory in Dongguan in the southern province of Guandong.... The factory declared bankruptcy on Saturday.

4/03/2002  1 general and 1 particular bankruptcy story mentioned in NY Times (NYT) & BG -
  1. [general]
    US, IMF disagree on bankruptcy policy, AP via BG, C2.
    The Bush administration...prefers a more limited approach to dealing with international debt than the one being pushed by the IMF.... Under current bond provisions, 100% of bondholders must agree to any payback at less than the full value of a bond..\..if a country defaults on its debt.... Under the US proposal, [only] 75% of bondholders could agree to restructuring of a country's debt....
    [Sounds like a less limited approach to us. Maybe the point is, it's a more modest (limited), less interventionist (limiting) approach.]

  2. [particular]
    Jet builder announces bankruptcy in Germany, by Petra Kappl, NYT, W1.
    FRANKFURT... - Fairchild Dornier, the No. 3 builder of regional and business jets and the heir to two venerable aviation names, filed for bankruptcy [yester]day...in a district court in Weilheim.... The company's managing director, Thomas Brandt, said..\..it had run out of cash.... Fairchild's only current production model is the 32-seat 328JET..\..
    The company, owned by the German insurer Allianz Capital Partners and the American investment firm Clayton Dubilier & Rice, has been trying for months to line up a strategic partner to help it bring to market a 70-seat jet [the 728JET] it has been developing since 1998.... The talks failed to yield a deal in time to forestall the bankruptcy filing, which was forced on the company by the solvency requirements in German law.
    [Great, maybe they can reshuffle the names to something more euphonious, and wind up with a Capital Allianz of Clayton Fairchild and Dornier, Dubilier & Rice.]
    If Fairchild collapses, it will leave the regional jet business to...Bombardier of Canada and Embraer of Brazil. (The fourth major entrant, BAE Systems of Britain, said last fall that it would exit the market....)
    The company's main operations, with 3,600 workers, are based at Oberpfaffenhofen, Bavaria, near Munich...
    ["Oberpfaffenhofen"?! Whoah, Phil Hyde wishes he had used that one in his big name-calling session with talkshow host Howie Carr during the '96 race against Joe Kennedy. At least he got in "Schnitzelgruber."]
    ...reflecting its descent from Dornier Luftfahrt [how rude!], a German airplace builder bought by Fairchild in 1996 [and it] has 700 workers in the U.S., mainly in San Antonio.... Dornier and Republic Aviation, an American predecessor of Fairchild, built warplanes for opposing sides in World War II, planes that met in combat over Europe..\..
    Hours after Fairchild's filing..., the German economics ministry said it would help keep Fairchild in operation to avoid job losses....
    [Big mistake. The Deutschers should get out of all this low-level life support and just get themselves a shorter nationwide workweek like France, to share the vanishing work and centrifuge the ever-congealing spending power. And they could improve on France's simplistic model by keeping the workweek flexible and automating its response to market forces in the form of unemployment - if unemployment goes up the workweek comes down - if unemployment comes down, the workweek goes back up. And of course, they've got to redesign overtime in terms of automatic training&hiring conversion. Followup -]
    Germany: Loan for plane maker, by Petra Kappl, 4/05/2002 NYT, W1.
    Fairchild Dornier...received a $20m loan from its German creditor banks to ensure the company's liquidity temporarily...reported[ly] the first portion of a $90m loan package provided by the HVB Group, the state-owned Kreditanstalt fuer Wiederaufbau and the semi-state-owned Bayerische Landesbank....
    [Liquidity is good. Liquidation is bad.  Further followup - "Fairfield Dornier allowed to shift bankruptcy filing," Bloomberg via 5/22/2002 (see above) NYT, C4, states, "Fairfield Dornier's German parent, Fairfield Dornier GmbH sought protection from creditors in Germany on April 2 after amassing more than $670m in debt." To avoid 6 weeks of messy corrections, we'll just count this debt along with the 5/22 story.]

4/02/2002  1 bankruptcy with $?? debt, mentioned in NY Times (NYT) & BG - 4/01/2002  1 bankruptcy with $863m debt, mentioned in NY Times (NYT) & BG - For earlier bankruptcy stories, click on the desired date -

  • Jan-Mar/2002.
  • Aug-Dec/2001.
  • Mar-July/2001.
  • Jan-Feb/2001.
  • Dec/2000.
  • Oct-Nov/00.
  • Jul-Sep/00.
  • Jan-Jun/2000.
  • Aug-Dec/1999.
  • Prior to July 31/99.

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