Many people assume that a company’s financial troubles cease once they reach a certain size, but that couldn’t be farther from the truth. Any business can find itself facing a financial burden that isn’t easily or quickly resolved. Here are a few big companies that had to file for bankruptcy to either keep their business afloat, or get out of business all together.
In April of 2009, the U.S. Treasury Department put Chrysler into bankruptcy in an effort to restructure the company’s debt repayment schedule. The company was put under the control of the United Automobile Workers, Fiat, and the federal government. After two years, Chrysler was once again a profitable company.
In what has been called the largest failure in U.S. banking history, Washington Mutual filled for bankruptcy in September of 2008. When customers withdrew $16.7 billion over the course of 10 days, the United States Office of Thrift Supervision seized control of the bank and placed into receivership with the FDIC. Its remaining subsidiaries were sold to JP Morgan Chase by the federal government.
Enron made history in 2001, becoming the largest corporation to ever file for chapter 11 bankruptcy. The powerhouse energy company had been hiding billions of dollars in debt from shareholders, board members, and audit committees. By the time Enron collapsed due to scandalous accounting practices, its stock price had dropped from $90 per share to just under $1.
After years of dwindling car sales, General Motors was forced to file for reorganizational bankruptcy after the U.S. financial crash. Despite already pouring $19.4 billion dollars into the failing automaker’s accounts, the U.S. government eventually needed to give GM another $30 billion to keep them afloat during the reorganization.
Trump Entertainment Resorts
Trump Entertainment Resorts has filed for bankruptcy three times, and recently announced that it will file for it’s fourth in 2014. In the midst of the 2009 bankruptcy, Donald Trump resigned as the chairman of the board of directors due to disagreements with his bondholders.
Marvel may be dominating the box office with recent blockbusters like the Avengers and Guardians of the Galaxy, but in 1996 they were a far cry from the company they are now. After a decline in their trading card and comic book sales, which was their core business at the time, Marvel was forced to fire one-third of its work force. Under its financial reconstruction plan, Marvel agreed to pay back all of it’s bills, including those submitted prior to filing.
Kodak’s missed opportunities could qualify as one of the biggest slip-ups in corporate history. With the rise of the internet era, Kodak failed to adopt digital photography. The 120-year-old company’s business came to a halt in January of 2012. In order to pay its debts, Kodak opted to sell $525 million worth of patents to companies such as Apple and Google.
All businesses, whether big or small, can fall into a financial bind. For more information about business bankruptcy, make an appointment with Anthony Deluca, an experienced bankruptcy attorney in Las Vegas.