Famous Corporate Bankruptcies Part 2
The nation’s third largest airline suffered a major blow after the spike in fuel prices following hurricane Katrina. This added to the airlines financial difficulties after failing to achieve a profitable quarter since 2000. With high labor costs and the competition among low-fare growing, Delta decided to file for bankruptcy. Years after bankruptcy, Delta is once again thriving. The airline is now viewed by many analysts as the country’s top-performing major carrier.”They transformed the company amazingly well,” says longtime critic Roger E. King, an analyst for CreditSights, a New York-based institutional research firm.
The well-known finance and insurance company Conseco Inc. filed for chapter 11 bankruptcy protection in December 2002. The company was struggling with a $6.5 billion debt load, much of which was attributed to several unprofitable acquisitions that they made during the 1990′s. The purchase of Green Tree, the nation’s largest lender to mobile-home buyers which had a $6 billion dollar price tag, was one of the investments that hurt Conseco in the end. After their bankruptcy, Green Tree was divested and now the company solely focuses on insurance.
Tyco International Ltd.
In 2005, former CEO Dennis Kozlowski and CFO Mark Swartz of what was once Tyco, now TE Connectivity, Ltd. were found guilty of embezzling about $600 million from the company. This scandal forced the company into bankruptcy.
The east-coast based airline Us Airways filed for bankruptcy two times in a two-year period. The airline had a history of financial difficulties, but after the September 11 terrorist attacks, filing for bankruptcy was their only option for survival. The Reagan National Airport in Washington D.C., a major US Airways hub, stayed closed longer than any other airport in the United States following the attacks. Once the airport reopened, security delays, and a general reluctance to fly, negatively affected its profitable shuttle service between Washington, New York and Boston. In 2003, the airline received a $1 billion loan from the Air Transportation Stabilization Board, only to file for bankruptcy again a year later, unable to secure $800 million in annual cost cuts from its workers’ unions.
Trump Entertainment Resorts
Trump Hotels and Casinos filed for bankruptcy protection in November 2004, citing high interest payments on financing that prevented the expansion and refurbishment of their gambling hotels. A year later, the company emerged from bankruptcy under the name Trump Entertainment and Resorts. The company once again shortly thereafter, this time citing the recession and the resignation from the board, of founder Donald Trump for their reasons for filing. At the time of filing, Trump Entertainment listed assets of $2.06 billion and debt of $1.74 billion.
Los Angeles Bankruptcy Attorney
If your company is overburdened by debts and financial difficulty, McFarlin law would like to help. Our business experience and legal expertise can bring your company back onto the right track. We offer free bankruptcy consultations to prospective clients, so call today. (888) 728-0044 or email us here. We look forward to assisting your company.
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