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

Bankruptcies, Jul-Sep/2002

9/29-30/2002  3 new bankruptcies, mentioned in (WSJ) Wall Street Journal &/or (NYT) NY Times (not counting "[When your company is] In bankruptcy, getting laid off hurts even worse - WorldCom's ex-employees suffer loss of severance, end of health insurance," by Shawn Young, WSJ, front page) -

  1. 9/30  Bankruptcies...- Asbestos Claims Management Corp... Chapter 11, legal notice, WSJ, B6.

  2. 9/30  Bankruptcies...- Velocita Corp... Chapter 11, legal notice, WSJ, B6.

  3. 9/29  US Bankruptcy Court, Northern District of Georgia, Newnan Division - Knology Broadband, Inc., Debtor - ...Chapter 11..., legal notice, NYT, 3-11.
9/26/2002  2 bankruptcies, totaling $80.3m in debt, mentioned in (WSJ) Wall Street Journal &/or (NYT) New York Times -
  1. Enron-linked LJM2 Co-Investment files for bankruptcy, WSJ, C16.
    ...Chapter 11...partly in response to a lawsuit brought by its lenders.... LJM2, which was organized by former Enron CFO Andrew Fastow to move debt off Enron's balance sheet, owes $70m to a bank group led by Dresdner [which] sued...to recover the money....

  2. Organogenesis files for bankruptcy, Bloomberg via NYT, C5.
    ...A maker of bioengineered skin substitute [Apligraf] filed for...Chapter 11 protection...in Massachusetts.... The company has assets of $24.5m and debt of $32.3m.... Novartis, which is owed $10.3m, is...the largest unsecured creditor....
    [32.3-24.5= $7.8m in net debt.]

9/25/2002  2 bankruptcies, announced in (WSJ) Wall Street Journal &/or (NYT) NY Times -
  1. Communication Dynamics files for bankruptcy, Reuters via NYT, C4.
    ...The parent of the cable TV products distributor TVC Communications Inc...filed to reorganize under Chapter 11 of the Bankruptcy Code. The company, based in Annville, Pa., filed on Monday...in Wilmington, Del.  [It] is expected to run its business without interruption..\.. TVC...was founded in 1952....

  2. Bankruptcies...- SAirGroup Finance (USA) Inc... Chapter 11, legal notice, WSJ, B11.

9/24/2002  1 bankruptcy, announced in (WSJ) Wall Street Journal &/or (NYT) NY Times - 9/17/2002  3 bankruptcies, mentioned in (WSJ) Wall Street Journal &/or (NYT) NY Times -
  1. Bankruptcies...- Bangor & Aroostook Railroad Co... Chapter 11, legal notice, WSJ, B11.

  2. Isle of Capri Casinos Inc., NYT, C4.
    ...agreed to purchase the State Line & Silver Smith Casino Resorts in Wendover, Nev., for $30m in cash. The agreement is subject to approval by state regulators and Federal Bankruptcy Court.

  3. Claims prompt bankruptcy, Bloomberg via NYT, C12.
    ACandS Inc., a former insulation contracting company once owned by Armstrong World Industries, has filed for bankruptcy protection after insurers cut off coverage for asbestos claims. ACandS, based in Lancaster PA, listed assets of more than $100m and debts [the same] in its Chapter 11 petition in Federal Bakruptcy Court in Delaware, ACandS,,,has settled or resolved about 247,000 asbestos claims since 1981....

9/16/2002  2 bankruptcies, mentioned in (WSJ) Wall Street Journal &/or (NYT) NY Times -
  1. Bankruptcies...- American Homepatient Inc., a Delaware corporation... Chapter 11..., legal notice, WSJ, B6.
    [and listing no fewer than 24 variations on the theme. Lordy, if you think the government has a monopoly on wasteful paperwork, check out the private sector some time. And these 24 largely regional variations are nothing compared to the thousands of corporate entities that slimeballs like Enron created to "roundtrip" money and puff their bogus profits.]
    ..\..US Bankruptcy Court, Middle District of Tennessee, Nashville Division

  2. Bankruptcies...- Stirling Chemicals Holdings Inc., et al., debtors... Chapter 11..., legal notice, WSJ, B6.
    ..\..US Bankruptcy Court, Southern District of Texas, Houston Division

9/14/2002  1 bankruptcy, mentioned in (WSJ) Wall Street Journal &/or (NYT) NY Times - 9/13/2002  1 bankruptcy, mentioned in (WSJ) Wall Street Journal &/or (NYT) NY Times - 9/12/2002  2 bankruptcies, mentioned in (NYT) NY Times &/or (WSJ) Wall Street Journal (not counting "German bankruptcies rise in half," by Chris Bain, WSJ, A12, which states "The number of German firms declaring bankruptcy rose in the first half of the year, government statistics showed.... Germany's Federal Statistical Office said the number of bankrupt corporations and business partnerships rose 10% to 11,700 from 10,600 in the first six months of 2001 [sic]. The figure excludes the self-employed and free-lancers. Courts recorded a total of 18,500 bankruptcy applications from businesses through June, the Office said..\.. Chancellor Gerhard Schroeder...blames the slow world economy for Germany's woes, including unemployment of nearly 10%.") -
  1. Reliance Steel completes purchase, WSJ, B8.
    ...of a Metals USA Inc. business [Specialty Metals Northwest], after approval by the court overseeing Metal USA's bankruptcy filing.... Metals USA filed for Chapter 11 bankruptcy protection in November [2001]....
    [Not caught and counted then, so we count it now.]

  2. Bankruptcies - in the US Bankruptcy Court for the District of Delaware, WSJ, B9.
    In re: Network Access Solutions Corp. and NASOP Inc. debtors
    Chapter 11...
    Notice of deadline for filing proofs of claims.... Nov. 8, 2002....

9/03/2002  2 bankruptcies, mentioned in NY Times (NYT) &/or Wall Street Journal (WSJ) - 8/24/2002  2 bankruptcies, mentioned in (NYT) NY Times or (WSJ) Wall Street Journal (not counting "Utah residents lead U.S. in bankruptcy," AP via NYT, A7, which states, "In the year ended March 31, roughly one out of every 35 Utah households filed for [personal] bankruptcy, said the American Bankruptcy Institute.... The national average is one for every 69 households.... July saw a record 1,915 filings." Doesn't say much for the Latter Day Saints alias the prevailing Mormon religion of Utah. The article also states, "A record 1.5 million people filed for [personal?] bankruptcy in the U.S. in the past year. Filings for the second quarter of 2002 were also a record, more than 400,000, the Institute said.") -
  1. Gadzoox Networks files for bakruptcy protection, Dow Jones/AP via NYT, B4.
    Hurt by waning sales...a maker of products for data storage networks...based in San Jose, Calif..\..filed for Chapter 11.... The bankruptcy petition, filed in Federal Bankruptcy Court for the Northern District of California, listed assets of about $10m and liabilities of about $14m....
    [So that gives us a debt of 14-10= $4m.]

  2. Regent Communications, NYT, B4.
    ...Covington, Ky., said its bid to buy 12 radio stations from Brill Media, Evanston, Ill., for $62m had been approved by the administrator for Brill's bankruptcy proceeding.

8/23/2002  1 bankruptcy, reported in NY Times (NYT) or Wall Street Journal (WSJ) - 8/21/2002  1 bankruptcy, reported in NY Times (NYT) or Wall Street Journal (WSJ) - 8/17/2002  1 bit of happytalk & 5 bankruptcies/liquidations in the news, with $18.2m in "debt" + unspecified, reported in NY Times (NYT) or Arizona Republic (AR) -
  1. Atlantic Express Transportation files for Chapter 11, Reuters via NYT, B4.
    The...corporation whose buses carry children to school in 9 states filed for...bankruptcy protection yesterday.
    [The executives must have really been looting it to get this captive-market corporation to crash!]
    The privately held company, one of the largest bus operators in the U.S., listed $298.7m of assets and $257m of debts in papers filed with the bankruptcy court in Manhattan.
    [And they're filing in Manhattan for extra sympathy - this is a scam.]
    Including 64 affiliates that also sought court protection, the company listed $312.4m of assets and $330.6m of debts.
    [64 affiliates? This is a mini-Enron!   330.6-312.4= $18.2m "debt."]
    Nathan Schlenker, CFO of the parent company, the Atlantic Express Transportation Group, which also filed a Chapter 11 petition, said in a filing that the debtors intended to keep operating while they reorganized.
    [Oh, you bet they do - and they can keep skimming this milch cow and keep declaring bankruptcy to stiff suppliers every 7 years or so, especially if some 9/11-type event conveniently occurs to grant them cover.]
    Atlantic Express is based in Staten Island, NY.

  2. Cold Metal Products Inc., NYT, B4.
    ...Sewickley, Pa., a steel processor, [will] seek bankruptcy protection because of high costs and pricing pressures in the steel industry.
    [More info on this bankruptcy from the WSJ in our downsizings on Monday, 8/19/2002 #1.]

  3. Eatery files bankruptcy year after federal loan, AP via AR, B7.
    YUMA, Ariz. - A restaurant that opened a year ago with the help of a $140,000 loan arranged by the city has filed for Chapter 11 bankruptcy protection. Monarch's Rest Brewpub & Restaurant will remain open, co-owner and general manager Ian Watkinson said.
    City Administrator Joyce Wilson said the city was disappointed to learn of the bankruptcy filing but would do what it could to help the restaurant survive, including renegotiating the federal Community Development Block Grant loan. The federal loan program typically helps low-to-moderate-income families. But money from the program also can be used to help private businesses as long as they meet specific criteria.
    [Here's another federal bandaid program, expensive to taxpayers, that can be dismantled when we stop fooling around trying to stanch the hemorrhaging of our economy by worrying about the myriad of minor leaks at the bottom and sides, instead of the major leak at the top and center. Too much of the surviving human employment (and pay) is getting concentrated on too few people as waves of mechanization, automation, and robotization wash over and transform the economy. For the first 3/4 of the Industrial Revolution we adjusted the workweek downward to compensate (and even then we didn't do it fast or far enough, as 1929-1941 showed). Then we stopped. We've got to resume that downward adjustment and spread the vanishing work onto everyone. Only a balance of jobseekers and job openings can discipline employers enough to cut the kind of fraud and short-sightedness we've been seeing. There are difficulties along this path but they are the right difficulties. We call it Timesizing.]

  4. 2 Valley electronics retailers shut down, by Glen Creno, AR, D1.
    Two of the [Phoenix] Valley's big-name electronics and appliance retailers have closed under pressure from a sour economy and booming competition from national chains.
    Roy Edwards Warehouse, which once operated stores in Phoenix, Gilbert, and Scottsdale, selling TVs, audio gear and appliances, filed for Chapter 7 bankruptcy liquidation....

  5. 2 Valley electronics retailers shut down, by Glen Creno, AR, D1.
    ...Buzz Jensen's Sound Advice filed for a Chapter 7 liquidation and closed stores in Phoenix and Scottsdale.
    Jensen, a fixture in the TV, audio and home theater business for 23 years, now runs but doesn't own Paradise Home Entertainment in the Robb & Stucky store in Scottsdale...offering services similar to his old stores: sales, design and installation of home theater systems..\.. "About five different things hit me at once, and I couldn't recover from it," Jensen said.... He doubts he'll go back to owning stores. "The retail business, as we used to know it, has become a much more expensive and much less profitable situation," he said. "There's not a lot of funding to be a high-quality, slow-turn[over], one-on-one company."
    Local home theater and appliance retailers have been under the gun since the economy went bad and consumers began spending more cautiously. They also face stepped-up competition from aggressive newcomers like Showcase Home Entertainment and Ultimate Electronics, chains with big marketing and pricing muscle....

8/15/2002  1 big liquidation, reported in NY Times (NYT) or Wall Street Journal (WSJ) - 8/14/2002  more US Air bankruptcy backwash, reported in NY Times (NYT) or Wall Street Journal (WSJ) - 8/13/2002  1 huge bankruptcy backwash & 1 story, reported in NY Times (NYT) and Wall Street Journal (WSJ) -
  1. Bankruptcy move jolts confidence in large airlines - Wall St. hammers stocks - But some say restructuring of US Airways may help the industry over all, by Edward Wong, NYT, front page.
    [Keep smiling, every cloud has a silver lining, look on the bright side, the cup is half full not half empty, whistle a happy tune, count your blessings, keep siiinging in the rain...]
    US Airways flight to bankruptcy, editorial, NYT, A20.
    ...was as well thought out as they come....
    U.S. may be recast as financier of recovering airlines - US Airways to be test of an expanded role, by Stephen Labaton, NYT, C1.
    [This raises the question, of course - are they really going to recover?]
    Until this week...the Air Transportation Stabilization Board..\..the government board overseeing the bailout of the airline industry had acted like a bankruptcy court in miniature, requiring all applicants for financial aid to cut costs and wring major concessions from unions. Now, with the Ch. 11 filing of US Airways, which had applied for a $900m loan guarantee to secure a $1B loan, the Board takes on a new role as a potential financier of companies actually arising from bankruptcy....
    Texas Pacific hopes to revive another airline, by Sorkin & Atlas, NYT, C1.
    ...The Texas Pacific Group, the private equity firm that took Continental Airlines and America West out of bankruptcy nearly a decade ago, is putting its money [$500m] behind US Airways.....
    [Wonder where US Airways plans to get the other half billion?]
    Others failed, but this bankruptcy is given a chance - The Process: Other airline bankruptcies may have failed, but experts give this one a chance, by Daniel Altman, NYT, C1 & C6.
    ...Airlines...have a bad record of trying to survive bankruptcy filings. Uncertainty among US Airways customers - What will the airline look like after it emerges from Chapter 11?, by Donna Rosato, NYT, C8.
    ...But there was no sign of a rush away from bookings on the airline.
    ..."Certainly, a carrier that is reorganizing under Chapter 11 becomes a smaller carrier...," said David Castelveter, a US Airways spokesman....
    A bright side to US Airways tale, by Joe Sharkey, NYT, C9.
    ...according to Hal Rosenbluth, the CEO of Rosenbluth International, the 3rd-largest global travel management company. The US Airways action brings into sharp focus the fundamental problem that has pushed the airline industry to the edge of a cliff, he said. "The fare structure is broken."... The industry's travail will continue, he added, "until someone takes a leadership position and insists on a rational pricing structure." [His] report - "Who's zooming who?" - is on the *Rosenbluth website. Click on "About Us," then "Press Releases" and then "2001."
    US air travel continues to languish, by Joe Sharkey, NYT, C9.
    ...According to published airline schedules for August, the number of domestic flights was down 7%, and international flights down 8%.... The actual situation is worse than...because many airlines have been flying smaller-capacity planes since last year....

  2. [Non-lawyers] preparing petitions: It irks the lawyers, but is it lawyering? [headline is nonsense without the addition], by Adam Liptak, NYT, front page.
    ...A rapidly expanding cottage industry that helps people file papers in bankruptcy and divorce cases and other legal proceedings like preparing wills has drawn increasing attention from the bench and the bar. In the last seven years, for example, Justice Dept. officials have filed almost 4,000 motions seeking to stop bankruptcy petition preparers or to reduce their fees....
    [One might wonder what legal basis they concoct for fixing other people's fees, let alone stopping their form-prep service.]

8/12/2002  1 bankruptcy, reported in NY Times (NYT) and Wall Street Journal (WSJ) - 8/09/2002  1 bankruptcy story, in NY Times (NYT) or Wall Street Journal (WSJ) - 8/02/2002  1 bankruptcy, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/31/2002  1 bankruptcy, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/30/2002  1 bankruptcy, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/29/2002  1 bankruptcy story, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/27/2002  2 bankruptcy stories, in NY Times (NYT) -
  1. A bankrupt bill, editorial, NYT, A22.
    It was probably too much to think that Congress's stand-up attitude to big business would last until the weekend. A little more than day after passing tough corporate-governance legislation, lawmakers rushed to approve an ill-advised overhaul of the nation's bankruptcy laws long sought by credit card companies and other creditors....

  2. A sudden rush to declare bankruptcy is expected, bt Philip Shenon, NYT, B1.
    WASHINGTON...- With Congress close to final approval of a bill supported by the White House to overhaul the bankruptcy system, lawyers and consumers groups [yester]day predicted a rush of bankruptcy filings by people seeking to erase their credit card bills and other debts before the tougher rules take effect....

7/26/2002  1 bankruptcy & 1 bankruptcy story, in NY Times (NYT) & Wall Street Journal (WSJ) -
  1. [1 bankruptcy]
    Jacobson Stores, struggling department store chain, to close, AP via NYT, C4.
    ...A 134-year-old regional...chain is going out of business.... Jacobson, based in Jackson, Mich., has 18 stores in Mich., Ind., Oh., Ken., Kan., and Fla..\.. A federal bankruptcy judge gave the retailer permission yesterday to sell its merchandise, credit cards and equipment to a group of liquidators. The decision ended months of uncertainty during which the company was unable to pay its bills or find a buyer. Jacobson...accepted a final offer from a group of 5 liquidators after an auction on Wednesday....
    [So this would probably be Chapter 7 bankruptcy in the form of liquidation, rather than Ch. 11 in the form of reorganization.]

  2. [1 bankruptcy story]
    Negotiators agree on bill to rewrite bankruptcy laws - A victory for creditors - Measure makes it a lot harder to escape debts - Passage is expected, by Philip Shenon, NYT, front page.
    ...Credit card companies and other lenders have contended that they are being unfairly penalized as a result of the nation's growing rate of bankruptcy filings. There were 1.45 million filings last year, a record, up 19% from 2000.... The companies had drastically stepped up campaign contributions to members of Congress in recent years as they pushed for the legislation..\.. The bill...would end the ability of millions of Americans to use the bankruptcy system to wipe out credit card bills and other loans that are not secured by homes or other assets. Many of those debts would have to be paid back over time....
    [Thus concentrating more spending power in the unspendable accumulations in the top brackets and conducing even more strongly toward recession.]

7/25/2002  1 bankruptcy story, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/24/2002  1 bankruptcy story, in NY Times (NYT) & Wall Street Journal (WSJ) - 7/22/2002  1 bankruptcy, in NY Times (NYT) & USA Today - 7/16/2002  1 bankruptcy, in NY Times (NYT) & USA Today - 7/13/2002  1 bankruptcy story, in NY Times (NYT) & Arizona Republic (AR) - 7/10/2002  1 bankruptcy story, in NY Times (NYT) & Arizona Republic (AR) - 7/06/2002  2 bankruptcies, with $?? in debt, in NY Times (NYT) & BG -
  1. Japan: Builder in bankruptcy, Bloomberg via NYT, W1.
    Dai Nippon Construction, a general contractor,...filed for bankruptcy protection with 271.2B yen ($2.3B) in debt, much of which went toward ill-timed golf course development. It was the second-largest failure of a publicly traded Japanese company this year and brings the total to 23; last year the figure was 14. Like other contractors, Dai Nippon got into trouble when real estate prices collapsed at the beginning of the 1990's.

  2. Germany: Babcock Borsig on the brink, Bloomberg via NYT, W1.
    ...A German engineering company employing 22,000 people [that] makes steam turbines, power plants, and industrial boilers..\..filed for protection from creditors after two days of talks with banks and politicians broke down. Babcock needed 200m euros ($196m) to pay June salaries but banks are reluctant to extend more credit. Its debt amounted to 1.5B euros ($1.47B) at the end of March. Chancellor Gerhard Schroeder was still pursuing ways to avert the collapse, which would be the 4th major corporate failure this year....
    Big German engineering company fails - A fourth large company goes under in an election year, by Otto Pohl, 7/09/2002 NYT, W1.
    BERLIN...- After searching through[out] the weekend for a way to persuade its banks to advance more cash and keep it afloat, Babcock Borsig, the giant German engineering company, came up empty [yester]day.... The company...employs 13,000 people in Germany and 8,000 elsewhere, building power plants, turbines, boilers and other heavy machinery. Its workers have not yet been paid for June....
    [Gee, just like Russia.]
    With the economy in the doldrums, unemployment above 9% and rising, and federal elections in Germany less than 3 months away, officials are eager to avoid another prominent failure that could harm Chancellor Gerhard Schroeder's chances of re-election.
    [Looks like he's toast. Officials may be eager but they're ineffectual. None of them are catching onto Timesizing fast and focused enough to spread the vanishing work&wages and restore effective demand.]
    ...The premier of..\..North Rhine-Westphalia, where Babcock Borsig has its HQ,...Wolfgang Clement,...said that...the government would seek an overhaul of the company and replacement of its management, rather than liquidation. But Wolfgang Hartmann, a managing director of Commerzbank, told Reuter [yester]day that the company was beyond saving....
    Various political parties say the company's difficulties as emblematic of the weak German economy. The chief spokesman for the Christian Democrats, Mattias Wissmann, said Germany faced a serious structural crisis....
    [So does the whole world. We need an automatic mechanism that adjusts the workweek downward to maintain the workforce and the consumer base as we inject worksaving technology into our economies.]
    Babcock's failure follows those of
    1. the Kirch media group
    2. the aircraft manufacturer Fairchild Dornier
    3. and Philip Holzmann, a major construction and property company....
    [Time to oust Schroeder and get somebody who's a little more hip to the Timesizing imperative - to the power and urgency of sharing the vanishing work.]

7/02/2002  3 bankruptcies, with $?? in debt, in NY Times (NYT) & BG -
  1. CMGI buys bankrupt company, by Andrew Zipern, NYT, C11.
    The technology holding company that owns the search engine AltaVista [will] buy the assets of Software Logistics, a bankrupt company that does business as iLogistix, for $41m. Software Logistics, based in Fremont, Calif., makes supply-chain management software.... Most of the company's 500 employees will be offered jobs, CMGI said....

  2. [2 in 1 -]
    Germany: PixelNet seeks debt relief, Bloomberg via NYT, W1.
    ...A German processor of digital photographs...filed for protection from creditors...at a local court in Dessau after its Photo Porst unit sought protection from creditors last week, [it] said in a statement to the Frankfurt exchange. Photo Porst is no longer able to repay loans it owes PixelNet on time [and] failed to find investors for the owner of photography stores that it acquired for a symbolic price of 1 deutsche mark (51 cents) last year....
    [Not such a bargain after all?]

For earlier bankruptcy stories, click on the desired date -

  • Apr-Jun/2002.
  • 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.

    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.

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