Famous Corporate Bankruptcies Part 1
Chapter 11 Bankruptcy is reorganization bankruptcy. This type of bankruptcy is used in bankruptcy cases involving large corporations and businesses. In this 4-part blog post we will look at some of the most influential and high-profile Chapter 11 bankruptcy cases of the last decade.
Pacific Gas & Electric Co.
In April 2001, Pacific Gas & Electric Co. filed for chapter 11 bankruptcy. Pacific Gas & Electric Co., is a subsidiary of the nation’s largest utility holding company, PG&E Corp which provides natural gas and power to central and northern California. Pacific Gas & Electric Co. had accumulated $12 billion in debt and $36 billion in assets at the time of filing. California’s 1996 deregulation law was blamed as the culprit for the bankruptcy filing. With soaring wholesale power costs surpassing retail prices, the deregulation law prevented the company from raising their prices to customers to make up for the lost revenue.
In 2001, Enron was the biggest bankruptcy in U.S. history with $63.4 billion in assets. The company was involved in obscure accounting practices that concealed loses worth billions of dollars. By the end of the scandal, Enron’s stock plummeted from a high of $90 per share in mid 2000, to just $0.10 a little over a year later. This drop cost stockholders close to $11 billion.
Global Crossing Ltd.
Fiber-optic network operator Global Crossing Ltd, filed for bankruptcy protection in January 2002. The company was plagued by a waning demand for telecommunications services, and reckless corporate and executive spending. Global Crossing had assets of $25.5 billion and liabilities of $14.6 billion at the time of its filing, making it one of the biggest bankruptcy cases in U.S. history.
Once the fifth largest cable provider in the United States, Adelphia Communications’ success came to a grinding halt when founder John Rigas and his son Timothy were convicted for embezzling millions of dollars from the company. They were charged with hiding $2.3 billion in debt, and deceiving investors about Adelphia’s subscriber and profit growth. The father and son received prison sentences of 15 and 20 years in prison. Adelphia’s assets were later snatched up by Time Warner and Comcast in bankruptcy court.
With $107 billion dollars in assets, WorldCom’s bankruptcy case was one of the largest bankruptcies in U.S. history. Prior to it’s filing, WorldCom was regarded as one of the largest long-distance companies in the United States. The company’s financial decline was the result of a massive accounting scandal in which the company’s total assets had been inflated by an estimated $11 billion.
Your Corporate Bankruptcy Attorneys
In Los Angeles, having an experienced corporate bankruptcy lawyer at your side during your Chapter 11 bankruptcy is crucial. We offer free corporate bankruptcy consultations to prospective bankruptcy clients. Let us help your corporation get back on track. Contact us today for your free consultation. You can email us here, or call us at (888) 728 0044.
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