14 Bankruptcies

Here are 14 companies that filed bankruptcy…

1. Phoenix Coyotes – They started as the Winnipeg Jets before moving to Phoenix in 1996.  At filing, the company had $500 million in debts and less than $100 million in assets.  That’ll teach the business people that a hockey team might not belong in the desert.  Source

2. Hartmarx – The maker of President Obama’s suits, has filed for bankruptcy in January.  The company lists between $100 million and $500 million in assets and liabilities.  There is currently a bid for Hartmarx from Emerisque.  Source

3. Six Flags – The amusement company filed for bankruptcy after failing to refinance $2.4 billion in debt.  A company spokesman has said this is strictly a financial restructuring and will not affect any park operations.  Source

4. Crabtree & Evelyn – A high priced soap maker has listed between $10 million and $50 million in assets and at least as much in debts.  The company founded in 1973 has built it’s brands on natural products that use herbs, fruits and fresh flowers.  For now their stores will remain open and the website will remain in operation.  Source

5. Filene’s Basement – The chain filed for bankruptcy with assets of $100 million and liabilities as high as 5 times that amount.  Syms, a competing retailer has agreed to pay $65 million for the chain.  Included in the purchase are 23 or 25 stores as well as inventory.  The chain will continue to operate under the Filene’s Basement name.  Source

6. Extended Stay – The hotel chain filed in June with total debt of $7.6 billion and assets of $7.1 billion.  Room revenue plummeted by 23.2% during the first 5 months of 2009 compared to a year earlier.  The hotel chain will continue operations under it’s existing brands of Extended Stay America, Homestead Studio Suites, Studio Plus and Crossland.  Source

7. Eddie Bauer – The clothing retailer based in Washington filed in June.  It’s latest filing was in 2003 and emerged in 2005 and was spun off into it’s own company.  The chain, formerly known as Spiegal listed between $100 million and $500 million in assets.  CCMP Capital has bid $202 million for the chain and plans to keep all 371 stores open as well as catalog and web site operations.  Gift cards will be honored until September 1, 2009 or until the sale of it’s assets go through.  Source

8. Crunch Gym – The chain began in 1989 as a basement aerobics studio and over the last 20 years has grown to 28 locations around the country.  In may it’s leases became unmanageable as it listed at least $500 assets and liabilities.  New Evolution Fitness Co has entered into a purchase agreement.  Most locations will remain open, but may be relocated to get a cheaper lease.  Source

9. Pilgrim’s Pride – Rising raw material prices compounded by lower demand led the company to file for bankruptcy in December 2008.  The company listed $3.75 billion in assets and $2.72 billion in debts.  Operations will continue and no further layoffs are planned.  Source

10. The Daily Blossom – The floral arrangement design company lists just under $50,000 and liabilities between $100,000 and $500,000.  Source

11. Debt Relief USA – The debt consolidation company lists $5 million in liabilities and $4.65 million in assets.  The company has shut down and left it’s customers without services they paid for.  Source

12. The Tribune Co – The owner of the Chicago Tribune and LA Times filed at the end of 2008.  The company will operate normally while in bankruptcy which was designed to lighten the debt load.  Source

13. Vallejo, California – The town in California filed bankruptcy as property taxes plunged.  The town is home to one of Six Flags most successful theme parks, which has also entered bankruptcy protection.  Source

14. Lear corp – The company manufactures seats and electronics for cars lists $1.3 billion in assets and $4.5 billion in debt.  The company has already found financing and is expected to exit bankruptcy within 60 days.  Source

GM Bankruptcy Plan Approved

After receiving almost $50 Billion from the US government, the bankruptcy judge approved GM’s emergence from Chapter 11 after a 4 day period where creditors will be able to file appeals.

Source

Chrysler Won’t Repay Feds

Chrysler won’t be repaying the federal bailout money in the amount of $7 billion.  Taxpayers will however be receiving something for their money in the form of Chrysler stock, which will be sold at a later date once the company recovers.  This has the potential to actually make money for taxpayers if the company can complete the turn around and start making money again.

Read the full article on CNN

Chrysler Bankrupt

It didn’t take long for Chrysler to take one to the head.  Chrysler filed for bankruptcy Thursday 4/30/09 and today announces 4 plants identified to close by the end of 2010.  If they’ve identified them, why wait almost a year and half to close them?  Shut them down in 2 months (legally required 60 days notice for large layoffs).  I’m sure they could ramp down production in that time and have a fire sale on the equipment, or move it to more productive factories.  The Obama administration in Washington states the process will be relatively quick (30-60 days) and the deal with Fiat will also close during that same time period.  

According to government officials, a new company will be formed that will buy all the assets of Chrysler including contracts relating to suppliers, labor and dealers.  Everything else will be dumped by the bankruptcy court.  

As part of the deal, Chrysler Financial will be completely shut down and all loans will be made through GMAC which will affect 3,400 jobs.

CEO Robert Nardelli will be leaving the company after the merger and bankruptcy are completed.  Fiat will take over all management functions of the company at that point.  One bright side is that Fiat has committed to building small cars that it now builds in Europe and sells in the US.

The ownership is as follows: 

UAW – 55%

Fiat – 20% (option to increase to 35%)

US Governement – 8%

Canadian Government – 2%

The four plants slated to close include: (About 5,000 jobs)

1. Sterling Heights, Michigan – Assembly plant for the Chrysler Sebring and Dodge Avenger.

2. St. Louis assembly plant that for the Dodge Ram pickup.

3. Twinsburg, Ohio stamping plant.

4. Kenosha, Wisconsin engine plant.

Company spokesman Ed Garsten said all affected workers will be offered positions in alternate locations depending on how fast Fiat ramps up production of it’s small cars.

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Auto parts makers asking for aid

Auto parts makers have asked for $25.5 billion in aid from the federal government.  More than 40 auto parts makers filed for bankruptcy last year and many more are in imminent financial danger this year as car companies cut back production in the face of spiraling demand.

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Nissan to cut 20,000

Nissan announced it will cut 20,000 workers as it posted its first loss in 9 years amid the global recession.  The expected loss is expected to ring up to just under $3 billion.  As part of its cost cutting, the company also announced it will not pay a second half dividend to share holders.  Sales for Nissan in the U.S. plunged 31% in January.

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Chrysler buyout offered to all employees

 

Chrysler has announced it is offereing buyouts for all of it’s employees as a way to cut costs and provide a way out for workers that are nervous about the future of the auto industry.  The offer is for up to $50,000 for all of the 27,000 U.S. workers and also includes a voucher for up to $25,000 off a new car.

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Toyota Thinking Cuts

Toyota, one of the most solid car companies out there, is thinking of making cuts in the US and UK. A good point in the story is the company will make all cuts through voluntary programs as it has in the past.  No involuntary cuts are expected.  

Sales were down 18% for all of 2008 and 37% alone for December.

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Harley Davidson cutting 1,100 positions

Harley Davidson has said it will cut 1,100 positions in 2009 and 2010 as it cuts production values and reorganizes.

It will also consolidate it’s two engine plants in the Milwaukee area into a Wisconsin plant and discontinue it’s domestic transportation fleet.  It will also close it’s distribution facility in Wisconsin and consolidate it’s paint and frame operations in York PA.

The company said it expects to take charges of $110-$140 million and receive annual savings of $60-$70 million.

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Chrysler Shutting Down Production for 30 days

Most car companies shut down production for two weeks beginning Christmas Eve, but this year is obviously going to be different.  Chrysler is leading the way as they announce they will be shutting down production and employees will be told not to come back to work until Jan. 19th.  While this may seem like a good thing for the company as a way to save money and allow demand to catch up with supply, this will affect many more than just Chrysler and it’s employees.

Suppliers will be affected as they will also have to slow or stop production, which will cut their income, but will mean layoffs for their employees as well.  This will lead to a trickle down effect and will cause some crunches when it comes time to turn the machines back on.  

Chrysler stated that there is a lack of credit because people want to buy in their dealerships, but can’t get the credit necessary to do so.  This is in contrast as to what the competition is saying.  Ford and GM state they have available credit, but demand is down sharply.  The question is, what are the requirements for qualifying for credit?

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