[Commentary] © 1999 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Bankruptcies Aug-Dec/99

12/30/99  2 bankruptcies mentioned -

  1. Fruit of the Loom seeks Chapter 11 protection, Bloomberg via NYT, C4.
    ...A maker of underwear and T-shirts filed...yesterday after reporting five consecutive quarters of losses. Fruit of the Loom and 33 of its units filed...in U.S. Bankruptcy Court in Wilmington, Del., where it is incorporated. The company listed $258.3m in assets and $72.3m in debt.
    [Wait a minute, that doesn't sound like a problem. Maybe something in the next paragraph should have been listed -]
    Fruit of the Loom has had difficulties moving manufacturing overseas to save money in the face of about $1.3b in debt.... The company said it could have further losses from problems keeping track of inventory.
    [Moving factories overseas to sweatshops and they still can't make it, or even track their own inventory? Time to go. Followup: "Judge approves Fruit of the Loom recovery plan," Bloomberg via 4/20/2002 NYT, B3.]

  2. Ice cream cone maker seeks bankruptcy protection, AP via NYT, C4.
    ...Ace Baking Co...has filed for reorganization under Chapter 11 of the bankruptcy code. Ace, which is based in Green Bay, Wisc., owes $31.7m to secured creditors and has another $4m in unsecured debt.... Ace's sales had fallen short of expectations in the last year.... The company tried to sell its operations, but its bankers would not provide financial support through the process....
12/29 KCS [Energy] plans to file for bankruptcy protection, Bloomberg via NYT, C3.
...An oil and gas exploration company said it reached an agreement with noteholders to restructure its debt and will file for Chapter 11 bankruptcy protection by Jan. 18.... Under the agreement, [Houston-based] KCS must secure a new credit line for as much as $190m by Jan. 15 to replace its two current bank lines. KCS's shares have fallen about 97% since Oct/97, when recessions in Asia led to a slump in oil and gas prices....

12/28  Wheelchair maker files for bankruptcy, Bloomberg via NYT, C6.
Graham-Field Health Products filed...after failed attempts to sell the company, which has had five consecutive quarters of losses...because of competition in the medical equipment industry and as a result of fewer orders from health care providers that are stuggling to deal with [cuts] in the government's Medicaid health insurance program for the poor..\.. Graham-Field's petition, filed today under Chapter 11 of the bankruptcy code in Wilmington, listed more than [201-182= $19m in net] debts.... The company arranged more than $38m in financing for the reorganization....

12/23  Naya seeks bankruptcy after end of Coke link, by Constance Hays, NYT, C2.
...The [Mirabel, Qué.-based] bottler of spring water has filed for bankruptcy...in a reversal of the stellar rise that [owed much to] its having once been distributed by the Coca-Cola Co.'s largest bottler.... [It will] continue to fill orders while it reorganizes. It filed for creditor protection on Dec. 15.... A receiver has been appointed by Canadian bankruptcy regulators..\.. Until May, about 65% of Naya's bottled water had been distributed by Coca-Cola Enterprises, which gave it access to stores and other outlets across the U.S. and Canada. When Coca-Cola introduced its own bottled water...this year, the bottler stopped carrying Naya after six months, although it still offers Evian....
"We had to embark on a new system of distribution in the U.S. and Canada"..\..Naya's president, Stu Levitan...said.... While the changeover to the new distribution network has gone well..\..Anita Jarjour, a Naya spokeswoman...said, "we still have some work to do, and that's why we found ourselves in this position." The privately held Naya entered the bottled-water market about five years ago with a catchy slogan - "Hungry for life, thirsty for Naya"....

12/21  2 bankruptcies mentioned -

  1. N.H. insurance chief orders Tufts Health assets liquidated - No buyer found for ailing HMO's business; customers get 6 weeks to replace coverage, by Ralph Jimenez, Boston Globe, C1.
    ...Tufts, which its competitors blamed for building membership by underpricing health care in some markets, has been cutting jobs and paring costs for months in an attempt to salvage its core Massachusetts business.... Tufts announced its intention to pull out of Maine in September. Then last month the health plan said it would also pull out of New Hampshire and Rhode Island.
    Tufts expanded as part of an aggressive plan to capture market share...from 385,000 members in 1994 to more than 1.1 million, but it never made money on its northern subsidiaries.... Tufts will lose approximately $45m this year. Members who receive coverage through employers in Maine, New Hampshire, and Rhode Island will have to seek alternative health coverage by Feb. 2, when their coverage with Tufts New England ends....

  2. Number Nine Visual [Technology Corp.] files for bankruptcy, Dow Jones via Bos Globe, C9.
    ...and its units...under Chapter 11 in the US Bankruptcy Court in Mass.... The company said "the current liability situation was just too much to overcome." [However] Number Nine said it will be able to repay a significant portion of its outstanding liabilities..\.. Number Nine said it has been trying to raise additional capital since the summer..\..
    [So where's all that super-abundant high-tech venture capital when you really need it??!]
    In a release, Number Nine also said it signed a letter of intent to sell substantially all of its assets to S3 Inc. for $4.8m in cash and stock. Number Nine and S3 Inc. are in the process of completing a definitive sale agreement for submission to the bankruptcy court for approval....
12/14 Hanbo deal reached, by Samuel Len, NYT, C4.
After almost 4 months of talks, negotiations on the sale of So. Korea's bankrupt Hanbo Iron & Steel to a U.S. consortium led by Nabors Capital has finally been settled. The consortium [also includes UNX and Third Avenue Capital. It] agreed to take over management of the steelmaker after making a lump-sum payment [believed to be around $500m] by the end of Feb. 2000....

12/11  2 bankruptcy mentions -

  1. Learningsmith to shut stores - Heavy competition cited as Burlington firm files for Chapter 11; 2,350 will lose jobs, by Chris Reidy, Boston Globe, C1.
    ...The educational toys-and-games retail chain founded by local entrepreneur Marshall Smith said yesterday it plans to close all 87 of its stores by mid-January and go out of business.... Learningsmith...counted public TV station WGBH [Boston Channel 2] as an early investor...and the chain was once known as WGBH Learningsmith..\.. Harold B. Murphy of Hanify & King, the Boston law firm that represents Learningsmith [said that] most of the company's senior executives, including chief executive Janet Emerson, have "departed" already....
    Presumably Learninsmith couldn't figure out how to attract enough of the consumers' toy dollars in a world where everyone from Wal-Mart to Target and Toys "R" Us is selling toys. As if competition wasn't already fierce enough, brick-and-mortar toy sellers face new competition from Internet retailers such as eToys.com, Amazon.com and toysmart.com. Learningsmith attempted to stand out from this crowd by offering distinct product lines that were available nowhere else [such as] computer software, art supplies, books, puzzles, and science projects.... When it was founded in 1991, Learningsmith was believed to be a new kind of store, one that eschewed violent toys to focus on educational learning experiences for kids and adults.... Found on store shelves were videos and companion books of the Nova and Masterpiece Theater series, two staples of public television..\.. But [distinct product lines] were believed to account for less than 40% of the store merchandise....
    Among the creditors listed on Learningsmith's court documents were Citizens Financial..., Brio, and founder Smith. Smith said...he left Learningsmith in the mid-1990s to start Cybersmith, a cafe concept with computer terminals wired to the Internet at almost every table. Cybersmith also filed for Chapter 11 this year....
    [Well that's too bad. Learningsmith was one of the few remaining fun stores in Harvard Square, Cambridge, Mass., USA, now that the Square has gone upscale and 'megachain.' Let's see, - the Book Case on Church St. (a riot of used books from Mr. Johnson, his French wife & their son-in-law Korty), Pangloss (semi-rare) and old Erwin Rosen's Mandrake (art&psych) bookshops are gone, leaving just Schoenhof's (foreign) and Starr (used) of the original interesting set. The only interesting new ones worth a browse are Jas. & Devon Gray's (pre-1700) at 12 Arrow St, Patricia Juvelis' (inscribed & 1st editions...) at 1166 Mass.Ave and the Red bookstore nearly nextdoor. Then all the other stuff that moved away - Buddy's Steak Pit, Woolworth's and the Grill right at Harvard Sq. corner, Elsie's fabulous sandwiches and "the Bic", Briggs&Briggs Music now moved up Mass. Ave to practically Porter Sq, Chez Dreyfus for real French baba au rhum and the Blue Parrot/Ha'penny Pub and Ferdinands for baba with raisins, the old HongKong on Church St. for cheap Chinese food in rundown but cozy booths, Cronin's for pre-PC whale steak & beer, and the wonderful Hemispheres on Mt. Auburn where in the mid-70s you could get 2 eggs & sausage & homefries & toast & honey (metal cupful on every table) & coffee for $1.69 and gaze at all the vintage art and show posters plastered all over the ceiling. Guess we even gotta mention the old Wursthaus, even tho' it was run by a fascist (old Cardullo), defined as someone even whose own waitresses hated him. Then partway to Central Sq, Cambridge, in the Boston direction was the old Orson Welles Theater and Restaurant, where you sat at big tables in a big interior courtyard and ordered communally in blocks of four (remember the big loaves of gritty brown bread that came with the soup?). Jesu, Jesu, what a colorful Harvard Sq is past. Kupersmith Flowers is gone. At least there's still the old Crimson cigar store and Games People Play, and the Coop survives as a big bookstore. Is Grendel's Den still there?...]

  2. Lawyer's debt 'rescue' worse than bankruptcy, letter to ed. by Joseph P. Foley of Boston, Boston Globe, A18.
    As a practicing attorney concentrating in insolvency issues for over 15 years, I was keenly interested to read Bruce Mohl's article on Andrew F. Cappodocia ("N.Y. lawyer rescues debtors in distress from credit card companies," Metro, Dec. 6). Far from rescuing people, Cappodocia's "solution" ultimately costs the consumer 4-5 times what a simple bankruptcy would cost.... With a Chapter 7 bankruptcy, the procedure is over quickly, at a greatly reduced fee and without the emotional confrontation with one's creditors....
12/10/99 Motorola steps in to keep Iridium going - Leads investor group pledging $20m to satellite venture, by David Barboza, NYT, C4.
...so that the company would continue operating through early next year. [Iridium LLC] filed for Chapter 11 bankruptcy protection in August [8/14 below]....

[1 bankruptcy mentioned]
12/08/99  Medical Manager to acquire Physician Computer, Bloomberg via NYT, C4.
...Physician Computer, a seller of software for doctors' offices, said it had filed for Chapter 11 bankruptcy protection. The company, based in Morris Plains, NJ, said its reorganization plan included the sale of its assets to Medical Manager....

12/04  2 bankruptcies mentioned -

  1. Tultex, a maker of clothing, files for bankruptcy, AP via NYT, B3.
    ...A clothing maker in Martinsville, Va., has filed for Chapter 11 bankruptcy protection and laid off about 2,600 of the company's 4,300 workers in Va., N.C. and Jamaica.... The Big Board suspended trading in Tultex stock on Thursday after shares dipped to about 9¢ each. Tultex was profitable for decades until a price war broke out less than 3 years ago.
    [Maybe we can date from there the start of serious trouble-signalling deflation?]
    Tultex said its lenders had agreed to provide a $150m credit line, allowing day-to-day operations to continue.

  2. Approval is won for joint purchase of ICO Global, Bloomberg via NYT, B3.
    The cellular-phone pioneer Craig O. McCaw and Subhas Chandra, who runs India's most popular TV network, won U.S. Bankruptcy Court approval yesterday for a joint purchase of the satellite-telephone company ICO Global Communications Ltd...which filed for bankruptcy protection in August, days after a rival, Iridium LLC, did the same. Last month, ICO won court approval to receive $150m in short-term financing from Mr. McCaw to keep the company afloat [and] yesterday [to receive] a second investment...of $75m to be followed by a [third, of] $275m [from] both investors....
11/30  2 bankrupticies mentioned -
  1. BP Amoco's loss considered business as usual in Russia - Foreign investors see the handling of a Russian bankruptcy as a test case, by Neela Banerjee, NYT, C4.
    MOSCOW - ...Tyumen Oil, a BP Amoco rival in Russia, successfully persuaded a bankruptcy court last week to auction Chernogorneft.\ .the most valuable asset of Sidanko, a bankrupt petroleum conglomerate into which BP Amoco has plowed much of its.\ .half-billion-dollar investment in Russia.... Tyumen Oil then promptly bought [Chernogorneft] for a fraction of its real value....
    [But then, define "real value" in our crazy world today, where web companies with no products or profits fetch fortunes from fatuous stock fiddlers.  Russia's far better off without foreign "investment" anyway - all they need is to define and implement share per person - of employment - and Timesizing is just the ticket.]

  2. Yale's bookstore files for bankruptcy protection, AP via Boston Globe, D2.
    [Now how in the world, you ask, can a university bookstore, with a HUGE captive market and infinitely predictable sales, possibly in a million zillion years go...bankrupt???]
    The Yale Co-op university bookstore...listed an estimated $1m in debts to 300 creditors in its court filing this month.... "The reason for the filing is to preserve the Yale Co-op as a business and to preserve jobs for 33 employees".\ .said one of its lawyers, Dean W. Baker.
    [Well, that tells us nothing, except maybe staff wages are too inflexible and high relative to profits divided by the number of staff. Here's something that's supposed to make us feel better about, or at least distract us from, this non-explanation -]
    But the nonprofit co-op founded in 1885 [same year our granny was born] has no intention of closing its doors, said...Baker. "It is our intent to pay back 100 cents on the dollar," he said.
    [Well all bankrupts have that intention, Dean. How'd you get the level of debt that raised the issue in the first place, that's what we want to know.
    [By the way, you sure don't hear much about Yale these days. Used to be, you'd always hear about Harvard and Yale, Harvard and Yale. Now it's all Harvard, or Harvard and MIT. What the heck happened to Yale, old Mister #2?]
11/23/1999 Huge German builder nears bankruptcy - Talks on $2.6B bailout, run by Chancellor Schröder, falter, by Edmund Andrews, NYT, C4.
...Holzmann has been on the brink of insolvency since last week, when it...uncovered $1.3 billion in soured real estate loans...that it took on back in the early 1990's, when the reconstruction of eastern Germany was proceeding at a furious pace and the industry was having an extraordinary boom.... When real estate prices [there] collapsed as a result of overbuilding fueled by generous tax breaks, Holzmann found itself \in trouble.\ Holzmann's creditor banks had accused one another on Monday of either covering up evidence of trouble or being inflexible in coming to the rescue.... According to some news reports on Monday, the banks were short only about 400 million marks [17.4%] of the 4.3 billion marks, or $2.3 billion, they were trying to assemble..\.. Roland Koch, the Christian Democratic premier of Hesse [said,] "It will be very difficult for Holzmann to stay alive"....
[Aren't Germans supposed to be efficient? Wha' hoppen?? If die Deutschen let this one die, it could be the spark that ignites the Big Economic Armageddon that we all await so petulantly -
For lack of a nail, the shoe was lost.
For lack of a shoe, the horse was lost.
For lack of a horse, the battle was lost.
For lack of battle, the war was lost....
[Followup - "Big builder in Germany is bankrupt - Most banks refuse to back new bailout," by Edmund Andrews, 3/22/2002 NYT, W1.]

11/16 Crown Books Corp., NYT, C4.
...Landover, Md., which operates 92 discount book stores in major U.S. [cities,] emerged from bankruptcy court protection....

11/13 Filene's Basement to close almost half its stores, Reuters via NYT, B3.
...An off-price retailer...which sells brand-name apparel at a discount..\..said yesterday that it would close nearly half its stores and cut 900 jobs out of 3900 (23%) in a plan to emerge from Chapter 11 bankruptcy protection.... The retailer...based in Wellesley, Mass., filed for bankruptcy protection in August.... It did not list the stores that would close under the plan, which needs approval of the bankruptcy court.

11/04  2 bankruptcy mentions -

  1. Lenox Healthcare files for Ch. 11 protection, Bloomberg via Boston Globe, C9.
    Pittsfield, Mass.-based Lenox Healthcare Inc., the 2nd-largest privately held nursing home operator in the U.S., filed for Chapter 11 bankruptcy protection from its creditors, citing cuts in Medicare reimbursements as the chief cause of its financial woes. In petitions filed in US Bankruptcy Court in Wilmington, Del., Lenox listed more than $100m each in assets and debts....
    [Ah, wouldn't that mean 100m in assets & 100m in debts, i.e., breakeven??! Something seems to be missing here.]
    Lenox operates 109 health care facilities in 16 states, with more than 8,000 patients and 10,000 employees....
    [Does not sound like a breakeven ratio.]

  2. Bill protecting members of bankrupt HMO passes, by Steven Wilmsen, Bos Globe, C9.
    A bill to protect Massachusetts members of health maintenance organizations in case a provider goes bankrupt unanimously passed the House of Representatives yesterday [155-0]. The bill...would give the state insurance commissioner authority to prevent the liquidation of an insolvent HMO and help find ways to get it back on its feet. It would also give members of an insolvent HMO a chance to switch to a new carrier without being turned down because of preexisting health conditions. "The health care system is extremely fragile," [said Nancy Flavin (D-Easthampton), sponsor of the bill]....
    [And she ain't kidding!]
10/30 Sweepstakes operator makes bankruptcy filing, AP via NYT, B14.
NEWARK, Oct. 29 - American Family Enterprises, which runs a sweepstakes promoted by Dick Clark and Ed McMahon, filed for Chapter 11 bankruptcy protection today to help it settle dozens of lawsuits accusing it of deceptive advertising of its sweepstakes. [It] also announced that it had reached an agreement in principle that it expected would settle several dozen class-action lawsuits that have been consolidated in Federal court in Newark.... [It] said the bankruptcy would not disrupt separate agreements, entered over the last year, that paid a total of $6.9m in 40 states and D.C. to resolve similar accusations about sweepstake advertising....
[Lordy, Dick Clark and Ed McMahon deserve to be tarred and feathered just for forcing the words "American family" into association with this sleazy operation, never mind their wildly misleading junkmail.]

10/29 A bankruptcy in Japan gets the attention of 'vultures', by Stephanie Strom, NYT, C4.
TOKYO - ...The "vultures" are investors who specialize in buying bankrupt and distressed assets, and two of the top vultures are the Rothschild Recovery Fund...and Japan Recovery Capital Partners.... [Today] they are expected to announce a reorganization of Nikko Electric Industry, an automotive parts supplier that has the distinction of being the first Japanese company this century to be put into bankruptcy by its employees.... Japan is one of the few countries in the world where employees can petition the [bankruptcy] court to put their company under its care without management's agreement; Nikko Electric's employees did just that earlier this year.
[...thus ensuring themselves of a place in The History of Japan in the 20th Century, because it's unlikely that with only two months left, any other feisty band of employees is going to make it. Interesting development! It means that Japan can have not only hostile takeovers from outside but hostile bankruptcies from inside. God knows what grievances they must have had with management to pull this ripcord, but the time's getting late and we'll have to "fractel down" another day.]

10/27  [1 closedown - but how?? Official bankruptcy? Quiet liquidation? Other?]
Mactell Corp., NYT, C4.
...Austin, Tex., which made equipment to run with Apple Computer...products, announced it had gone out of business.

10/26 R.I. places Harvard Pilgrim in receivership, by Alex Pham, Boston Globe, D9.
Three weeks after freezing the company's assets, Rhode Island state regulators placed Harvard Pilgrim Health Care's operations in the Ocean State...where the health maintenance organization has 150,000 members..\..in receivership. [At] year's end...the financially ailing, Brookline [Mass.]-based HMO...will stop subsidizing its Rhode Island business. Harvard Pilgrim has more than 800 employees in Rhode Island.

10/23  2 bankruptcies mentioned on one day! -

  1. Lois Chapter 11 signals a shift in ad industry, by Stuart Elliott, NYT, B1.
    ...George Lois...has filed for bankruptcy [protection] for his agency company, Lois/USA. The loss of several big accounts was a primary cause of the filing. Lois/USA had about 280 employees....
    The decision...is indicative of the intensifying competitive pressures in the advertising industry. In the past, agencies that lost large clients could retrench, regroup and recover. But that has become increasingly difficult in recent years, as shown by the swift closings of agencies like Smith/Greenland; Geer, Dubois, and Ally & Gargano..\..
    [Again we see more and more 40-hour-plus jobs searching more and more desperately for less and less business, as our 60-year-frozen workweek concentrates more skills, business and money among fewer and fewer people who "just don't have any time" - e.g., to make purchases. "The more concentration, the less circulation" (aka the "marginal efficiency of wealth").]
    Mr. Lois, who began his advertising career in 1956 after working as a designer, was one of the foremost figures in advertising's so-called creative revolution in the 1960's and 70's. "It's a sad day, but I've had a hell of a career," Mr. Lois said....

  2. Goss Graphic Systems, NYT, B3.
    ...Westmont, Ill., which makes printing presses, won approval for its prenegotiated bankruptcy plan of reorganization, which includes provisions to reimburse trade creditors on a nine-month time-payment plan.
10/15 Sun Healthcare Group files for bankruptcy protection, AP via NYT, C4.
...One of the largest nursing home chains in the nation has filed for...Chapter 11...in Delaware..\..after more than a year of severe losses it attributes to declining Medicare fees.... Sun, which had $1.4 billion in losses from October 1998 through last June [and] is based in Albuquerque, NM, is the second big nursing home chain to file for bankruptcy protection recently. Vencor, in Louisville, Ky., filed in September after reporting $1.4 billion in debts.
[So what is this - nursing homes all have to wait till they rack up exactly $1.4b in red ink before filing?]

[Finally "the other shoe drops" - this was planned back on 8/18 - see below.]
10/13/99 Planet Hollywood files for bankruptcy, Reuters via NYT, C4.
Planet Hollywood International Inc. delivered a bankruptcy-court petition yesterday calling for closing 9 of its 32 U.S. restaurants. The company said the filing...was part of a plan meant to produce a reorganization and a quick exit from bankruptcy shelter in about two months....
[How likely is that when it took them nearly two months just to file after announcing they were planning to?]
More closings were possible among the nearly 80 Planet Hollywood outlets around the world, the filing said.

10/09 Harnischfeger Industries, NYT, B2.
...St. Francis, Wis., the world's largest maker of mining equipment, plans to sell all or parts of its Beloit Corp. pulp-and-paper-machine unit to help repay creditors as it works its way out of bankruptcy.
[There must be a story behind this one. How in the world could "the world's largest maker of mining equipment" have gone bankrupt?]

9/28 London Fog seeks bankruptcy protection, NYT, C14.
...One of the best-known names in raincoats, sought bankruptcy protection yesterday and said it would close about 110 of its 140 retail stores...and eliminate about 500 of the approximately 1500 jobs. The...filing in US Bankruptcy Court in Wilmington, Delaware, is aimed at halting the decadelong decline of the suburban Baltimore company, which has struggled against imported outerwear, towering debt and numerous management problems.
[As usual, one suspects the biggest problem was the last-mentioned.]
It closed its last U.S. factory, a Baltimore sewing plant, in 1997.... Competing with dept. stores that also sell London Fog products was a poor strategy....
[The thing about timesizing is that's it's a more forgiving strategy. It gives even stupid CEOs more time to smarten up - and less ambient trauma. Studies have indicated that management's biggest problem is not acting in time. Trimming and adding hours is something you can do all along the way. No Way is it as daunting as downsizing jobs. Everyone stays together, so you avoid the "walking wounded" hammer on the productivity of survivors. Timesizing is just a helluva lot smarter strategy when you're working with a social species on a 'Class M' planet.]

9/14  2 bankruptcies mentioned - hey, these are starting to get more common ... ohoh -

  1. Vencor files for bankruptcy citing cuts in Medicare fees, by Milt Freudenheim, NYT, C8.

  2. Singer files for Chapter 11, AP via NYT, C8.
    ...the world's largest maker of sewing machines....
    [Geez, if Singer, Levi's and Woolworth's can't make it in this "robust economy," we're toast!]
["Don't make any sudden moves."]
9/11 Optimum Health shuts down; 700 lose jobs - Sudden move by subsidiary of Frontier Group sends agencies scrambling to arrange care for 1,700 elders, by Alex Pham, Boston Globe, C1.
...Frontier Group Inc. [was] a nursing home firm that on July 14 [not reported then] sought Chapter 11 federal bankruptcy court protection with the hope that it could reorganize its finances and emerge as a more efficient company. That hope vanished Thursday...forced by the sheer lack of money....

9/10  2 bankruptcies mentioned -

  1. Hechinger Co. to liquidate, shut 117 stores - Thousands to lose jobs at home-improvement firm, Bloomberg via Boston Globe, C2.

  2. Pluma to close 4 plants, Bloomberg via NYT, C18.
    ...a maker of fleece and jersey clothing under bankruptcy protection since May [but not counted by us then] said it would shut four lants and dismiss 950 employees as it closes down after failing to find investors. The company...will shut two plants in Eden next week and lay off about 500 workers. In the next 6-8 weeks, plants in Martinsville and Vesta, Va. will close with the loss of 450 jobs.... Slumping sales, the loss of a large customer and poorly performing acquistions led to mounting losses.
9/9 Eskimo Pie shareholders approve liquidation, Bloomberg via NYT, C4.
The Eskimo Pie Corp. [corpse?] will sell its licenses and plants under a liquidation plan from its largest shareholder and suitor Yogen Früz World-Wide Inc.... The plan was adopted at Eskimo Pie's annual shareholder meeting....

9/08 Creditors accept Moscow's terms in oil company bankruptcy, by Neela Banerjee, NYT, C4.
BP Amoco and other foreign creditors...accepted an offer by the Russian Government to resolve the bankruptcy of the oil company Sidanko, a move that could bolster BP Amoco's yearlong effort to preserve its $571 million investment in the troubled company. BP owns a 10% stake in Sidanko, and is among its major creditors, along with a consortium of Western lenders led by Dresdner Bank of Germany....
[Funny how these big boys are so dumb. First they destroy an economy by their stupid impatience ("Oh, let's take 2 wks & convert Russia to a market system!"). Then they invest in it as if it was the US Treasury instead of Gangsterland. Then they act surprised at their 'elevated level of risk.'  The only thing that can save Russia now is systematic work(&skill) sharing along Timesizing lines. This is not all-controlling socialism/communism because the only thing it nationalizes is the workweek. It's simply a long overdue upgrade to mixed-market capitalism that actually lets us drop a lot of the lame detail-focussed socialism that has crept into market capitalism.]

9/02  2 bankruptcies mentioned -

  1. ["For what shall it profit So. Korea, if it shall gain the whole world, and lose its own Seoul(bank). Or what shall So. Korea give in exchange for its Seoul(bank)?" - apologies to St. Mark (8:36-37).]
    Korea to declare [Seoul]bank insolvent - South Korea to inject cash into big bank left unsold, by Samuel Len, NYT, C6.
    SEOUL - The South Korean Government plans to declare the ailing Seoulbank insolvent [today] before injecting [$3.4 - 4.2] billions of dollars into it after talks to sell it to a foreign bank [Brit-based HSBC Holdings] broke down....

  2. Submicron Systems Corp., NYT, C4.
    ...Allentown, Pa. a maker of semiconductor production equipment, filed for bankruptcy protection and agreed to be acquired by a management-led group to be called Akrion LLC for $55.5 million.
    [And here, kids, we see demonstrated the frequent connection between bankruptcy and takeover, though it's seldom all planned in advance like this.]
8/31 Bankruptcy's acceptance - Once rarity, this boom gaining Congress' attention - People see bankruptcy as an easy way to improve their finances or...as a legitimate social policy, by Robert Samuelson [the econ reporter in DC, not the classic textbook writer], Boston Globe, D4.
...Despite a booming economy, we're also experiencing a bankruptcy boom.
[Well any sane person would then turn around and question the validity of our economic "boom," n'est-ce pas? After all, there was also a boom in bankruptcies throughout the 1920s.]
In 1998, a record 1.4 million Americans declared bankruptcy; that was almost triple the number in 1988 (550,000)....
[Hmm, there was just such a tripling of bankruptcies between 1919 and 1921 (and actually a near quadrupling from 1919 to 1922). The fact that the economy now takes 10 years to do what it did in three 70 years ago gives us some indication of how much bigger it is and how much more wealth-centrifuging socialism we've installed in the "basement."]
It's no mystery how so much bankruptcy can mix with so much prosperity. As a society, we have made it ever easier to borrow. The credit card, once reserved for the affluent, is becoming almost universal. In 1995, about 2/3 of households had one.
[This is another factor we haven't talked about much (yet) on our 1920s parallels page. In the '20s, American businesses were just really discovering and opening up the "instalment plan" of paying for things.]
Meanwhile, we have also made going bankrupt ever easier.
[Oh yeah? We dispute this. We say this is a constant. What is he thinking of? Oh here we go - ]
...Ever since Congress liberalized the bankruptcy law in 1978, filings have risen.
[But HOW did they liberalize it?? No info.]
..\..The predictable result feeds on itself: As more people go bankrupt, it becomes more socially acceptable....
[And why not? The myth of fairness that binds people together is shattered in a pre-Depression period by case after case of dumb luck or timing enriching some people beyond the dreams of Midas. State Megabucks. Insane lawsuits - remember the little old lady who won a fortune in a lawsuit because she was driving and her coffee was too hot? Bill Gates. All the braindead yuppies who parrot "Oh I don't begrudge Bill Gates his money" - but $100B for ousting robust and serviceable CP/M with MS-DOS that then took years to catch up? Or for that burgeoning piece of complex kludge called Windows, that took years to catch up to Apple, and some feel it hasn't yet. C'mon! These are textbook cases of market failure - the failure of the market to deliver the highest quality, as are the qwerty keyboard (vs. the Dvorak) or for that matter, English spelling (vs. Simplified English Spelling or the Shavian Alphabet). Are humans going to remain this stupid forever? Of course not. We timesizers just want a bit more of intelligence to manifest in our lifetimes.
[There's plenty of incentive in this string of gold-veneered outhouses that we facetiously call our "economic edifice" to work any scam we can. Look at the Russkis and how those clueless clowns from Harvard enriched the few big gangsters among them by trying to jump them into a market system.]
Bankruptcy [has become] an informal welfare program for the lower-middle class. Women's groups especially oppose congressional efforts to tighten the bankruptcy law, because about 40% of bankruptcy filers are single women....
The trouble with leaving bankruptcy laws too lax is that it encourages overborrowing....
[We think the was to discourage overborrowing is tighter credit qualifications. And much much more automatic reinvestment by the rich. No system is stable with the kind of completely unbalanced centripetal force that we see on money in our present primitive economic design.]
Bankruptcy petitions are usually processed quickly in token hearings. The process is so simple it's a wonder that more people don't use it.
[Now you talkin', brothah!]
Economist Michelle White estimates that 15% of households might profit from bankruptcy: The debts that could be canceled exceed property that could be seized....
[Bottom line. Unless we get a better way to integrate this society than one-person-one-vote (now totally drowned out by out-of-control campaign fundraising) and the American Dream (now totally decayed into hitting the lottery or suing the deep pocket), we are going to come apart, just like the Russians, because our current primitive form of Capitalism just relies on too much blind faith in simplistic black boxes like the Invisible Hand and Perfect Information and Perfect Competition and Free Trade. Too much is left to chance, or rather, to exploiting the discipline and morality of a previous age. Now that we've commoditized and sold that Good Will of Olde, however, it's not there any more and like dummies, we're acting surprised. Look at all the old gentlemen's agreements that have "gone public" and sold out: DrKoop.com, lawyers and doctors now advertize, community banks have had their goodwill commoditized, rich people like Steve Forbes complain loudest about taxes, the biggest abusers like the NRA and neo-Nazis scream loudest about Freedom,... Look at all the old institutions that have been ruined - Woolworth's, Lechmere's, Filene's Basement, Eatons of Canada, the Bank of Montreal has moved to bloody Toronto, Levy's is in trouble, the Republican Party has become a coffin of money-grubbing gun-toting Bible-swinging maggots, the Democratic Party ain't far behind, our flabby President has the judgement of a gibbon.... It's like we're re-entering the chaotic Hyksos Period of ancient Egypt when families disintegrated, or the Matilda-Stephen Period of Dark-Ages England when, as the Domesday Book has it, "all the demons of hell are loose in the land." The rich don't give a damn. Why should anybody else? Hollywood is vomiting violence and sadism.
[We need to stop favoring the wealthy and flying into the Black Hole of astronomically concentrated wealth, and guarantee a livelihood, without charity, for everyone, in the most flexible possible way. We've got to stop the doubletalk about technology. It's not here to create jobs, it's here to SAVE WORK, and if we don't cut the workweek while it's coming in, we'll be cutting jobs, not saving work and making life easier and better for us all.
[We need a new integrating mechanism. We're ready for the next step. We must go ahead from one-person,one-vote to one-person,one-range-of-market-demanded-work. We've got to stop curing inflation by sacrificing employment and ultimately markets. We've got to harness and mobilize the plowhorse of charity and the warhorse of volunteerism and direct them, our best, against inflation instead of job insecurity and economic anxiety, our worst.
[And as for the whole idea of using debt for business-as-usual, it's time we phased it out, completely. Debt, like Keynesianism, that relies so completely on it, is a bandaid. It is not for permanent daily use. And without debt, we won't have a problem with bankruptcy, will we.
[How do we phase it out? With automatic reinvestment. Investment is too important a function to leave to the whim of the wealthy. It will be automatic in all future economies. There's just no sustainable alternative, considering that debt is unsustainable and the centralization of the taxation approach is inefficient. We need direct automatic reinvestment at the grassroots and up and down the frontlines of our corporate hierarchies, and the best initial targetter of such reinvestment is the incidence of overtime. But here again, we're redescribing Timesizing.]

8/28 Two weeks later, ICO follows Iridium into bankruptcy court - More trouble in the global mobile satellite telephone industry, by Andrew Pollack, NYT, B1.
LOS ANGELES, Aug. 27 - In the second bankruptcy filing this month by a satellite communications company, ICO Global Communications (Holdings) Ltd. filed for protection from its creditors today after having failed to raise money for skittish investors....
[Oo, "skittish investors". Could this be the "foothills" of the "rockies"?]

8/26  2 bankruptcies mentioned -

  1. Paging network to be silenced tomorrow - Conxus Communications to cease operations, by Jim Davenport, Bos Globe, D7.
    COLUMBIA, S.C. - Conxus Communications has sent a message to more than 80,000 paging customers: Your service is being cut off.  The company, in bankruptcy court since May, told customers that as of 5 p.m. tomorrow their cutting edge [Pocketalk] voice-mail pagers will go dead....

  2. ImmuLogic to dissolve, by Ronald Rosenberg, Bos Globe, D9.
    The remaining shareholders of...a 12-year-old [Waltham, Mass.-based] biotechnology company voted to liquidate and dissolve the company.... ImmuLogic's board of directors dismissed a last-minute proposal by an unnamed company to acquire ImmuLogic [because it] "lacked specificity, contained contingencies, and in its current state was not superior to the plan of liquidation approved by the stockholders."...
8/25 One huge Canadian bankruptcy, 3 stories - 8/24/1999 Two bankruptcies mentioned (delaying a 3rd, Eatons of Canada, to tomorrow, above) - more evidence of our "robust" economy -
  1. Pioneering discounter [Filene's Basement] seeks court protection, by Leslie Kaufman, NYT, C1.
    ...in another sign that the competitive discount apparel sector may be ripe for a shake-out....
    [Or "in another sign that" we're strangling access to the leisure benefits of technology by re-lengthening the effective full-time workweek, over-concentrating employment and income, shrinking our consumer base, and now extending business extinctions even into the discounters.]
    Filene's Basement Corp., which pioneered the business of offering designer clothing at cut-rate prices, filed for bankruptcy-law protection yesterday in Boston.... The concept behind Filene's basement started in 1908 when Edward Filene decided to offer the previous season's fashions at low prices in the basement of his elegant Boston department store.... Filene's Basement, based in Wellesley, Mass..\..was bought by Federated Dept. Stores in 1929 [and] split [from] Filene's...in 1984. [It] was taken private in 1988 by top managers and then went public in 1991..\..
    [There's a message here, and it ain't hard to miss - Wall Street, like the IMF, is becoming a Typhoid Mary. It's real good at "the kiss of death."]
    It has 4,000 employees and operates 55 stores, including 12 in the New York metropolitan area, and said all of its stores would continue to operate until a reorganization plan was completed....
    [And then?  (Check out the 4/30 story on our downsizing page for a hint.)]

  2. As planned, Zenith files for bankruptcy, AP via NYT, C2.
    [Oh, so it's not so bad because it's "as planned"? We're talking about our basic TV company here, remember Zenith TV's?!]
    Glenview, Ill., Aug.23 - The Zenith Electronics Corp., the maker of television sets, VCR's and digital equipment, filed for [Chapter 11] bankruptcy today as part of a long-planned overhaul...transforming Zenith [from manufacturing] into a sales, marketing and technology company....
    [Isn't bankruptcy kind of drastic for an "overhaul"?]

8/18 Two bankruptcies mentioned -

  1. Planet Hollywood plans Chapter 11 filing, Bloomberg via NYT, C4.
    ...the theme restaurant chain associated with the actors Arnold Schwarzenegger, Sylvester Stallone and Bruce Willis...[which also runs] All-Star Cafe restaurants, had losses for four consecutive quarters....

  2. [This kiwi is extinct unless a white knight appears.]
    Trustee: Kiwi Air near liquidation, AP via Boston Globe, F2.
    Kiwi International Air Lines will apply for Chapter 7 bankruptcy in five days unless the grounded, debt-ridden airline finds an investor willing to bring it back from almost certain death.... The tiny, Newark-based carrier is down to a staff of nine employees....
    [Here is the one situation in which downsizing, not just timesizing, is OK - corporate extremis.]

8/14 For Iridium, a quick trip back to Earth - Satellite company seeks bankruptcy protection, by David Barboza, NYT, B1.
CHICAGO, Aug. 13 - Just 8 months after it started an ambitious satellite telephone service that promised to communicate "with anyone, anytime, virtually anywhere in the world," Iridium LLC has filed for...Chapter 11 bankruptcy protection while trying to reorganize its finances and attract new customers....

8/13 Protecting rich bankrupts, editorial, NYT, A18.
If you are going to be bankrupt in America, the best places to do it are in Florida and Texas. Both states have unlimited homestead exemptions, meaning that bankrupts can protect their homes from creditors no matter how much they are worth.
Now, with little public debate, Texas is on the verge of making its bankruptcy protections even more generous.... A proposed amendment to the Texas Constitution would raise [the acreage of urban land you can shelter from one] to 10 acres.... [Even worse] the amendment, which has passed the Texas legislature and goes to the voters in November, [let's you protect] the business property..\..if you operate your business from your home [and] it is written so broadly that...a Houston property developer [could] shelter a huge office building, so long as he lived in an apartment in it.
[Meanwhile in Washington, a proposed bankruptcy bill is making it tougher for] middle-income and poor people forced into bankruptcy \while doing nothing\ to limit the ways that the...wealthy have of stiffing creditors, of which the unlimited homestead exemption is only the best known. The [Washington] bill deserves to be defeated [and another proposed] to keep Texas and Florida from providing such blatant protection to once-wealthy deadbeats.
[We disagree that somebody sheltering a huge office building is no longer wealthy. Truly the wealthy have millions of ways to distort the economy until the markets become seriously strangled with the paradoxical juxtaposition of fabulous stored wealth amidst strangled circulation and dying dynamism. Wealth may indeed "trickle down," but that's meaningless when it's constantly pouring, rushing, gushing UP.]

8/11/99 Insurer says it can't repay its creditors, Bloomberg via NYT, C8.
ST. LOUIS - The General American Life Insurance Co. said this week that it was unable to pay back $6.8 billion in customer deposits. On Tuesday, the Missouri Dept. of Insurance put General American under supervision.... General American, which is owned by its policyholders, is the state's largest life insurer.... Trading in General American's two publicly traded units was halted all day on Tuesday, and the stocks plunged today....
[Follow-up: 8/27/99, NYT, p. C4, "Metropolitan Life is acquiring General American {for $1.2b}".]

For earlier bankruptcy stories, click on the desired date -

  • 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