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[Commentary] © 2000 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Bankruptcies, December/2000


12/30/2000  2 more bankruptcy stories -

  1. LTV seeks bankruptcy, citing slower economy and steel imports, by David Barboza, NYT, B1.
    ...The nation's No. 3 steel maker files [yester]day for Chapter 11 bankruptcy protection for the second time in its history, blaming a slowing U.S. economy and competition from imported steel that LTV says is unfairly priced....
    [See yesterday's advance warning (12/29 #2 below), and compare Wheeling steel on 11/17, 2d item. Nucor is going to be the only U.S. steel company still standing because it's the only one smart enough to introduce timesizing instead of downsizing. Nucor coasts at $8/hr wages and a 24-hr workweek (three 8-hour days) but when the contracts roll it, it expands its workweek as much as necessary, up to 7 days a week and $20-22/hour for its employees. It has probably the most flexible and adaptable corporate design in the entire world, seconded by Lincoln Electric. As Lincoln says, ya gotta "Sacrifice together, starting at the top." If you don't understand sharing, you don't understand survival and worktime is the locus of the next big imperative in human sharing. Ultimately we need to get to money, but if we try to share that before sharing worktime, we're just fostering parasitism and bashing self-supporting incentive.]
    Wall Street analysts said other steel makers could be teetering toward bankruptcy, and even with...Chase financing, LTV could have a hard time securing more financing at favorable terms. "The state of the steel industry is so bad, I don't think they'll be able to get the financing they would have gotten five years ago," said Barry Vogel, an analyst at Du Pasquier & Co....
    [America isn't going to have a steel industry if it doesn't quit wearing its "rape me" sign toward all the foreign steel dumping in this country.]
    Executives at LTV and other steel makers say the government has failed to stop unfair trade practices that have permitted foreign competitors to "dump" excess steel in the U.S. market at below the cost of production. This, they say, has helped drive steel to a 20-year low....
    [Free traders who want to ignore this have a short-term view. Once foreign steel mills have eradicated the American industry, America will be vulnerable and we will have a major national-security issue, just the same as if America lets its smaller, the larger, farms die. Foreign steel mills will then jack up prices at will or cut us off entirely. "Nya-nya-nya-nya nyaaa nyaaa." But free traders don't seem to have the IQ to think long-term. As for the argument that American steel has uncompetitively high labor costs -]
    ...Steel industry experts say that some of the bigger steel makers, like LTV, are also being hurt by higher labor costs associated with unions....
    [- LTV would gain more labor-cost flexibility by copying Nucor and timesizing, but constant Wall Street whining about unions and labor costs ignores the fact that the less our national labor costs, the less our active spending power. If labor doesn't get the dough, Wall Street does, and the trouble with that is that Wall Street involves a lot fewer, a lot richer, people, who just don't need or actively spend their already astronomically concentrated spending power. In other words, Wall Street's short-term view clobbers our national consumer base - which Wall Street itself depends on. Consumer spending is two thirds of the American economy, and "the more concentration, the less circulation." So once again, if we keep up this blindered, short-term thinking, we are going to be a big 3rd-world nation like India and China, and Russia, but Europe, with its long-term thinking, is going to be left, patting us on the head tenderly, clucking maternally, and laughing behind our backs.]

  2. Mitsui seeks debt relief, Bloomberg via NYT, B2.
    A major Japanese general contractor [will] ask its creditors, including Sakura Bank Ltd, Chuo Mitsui Trust & Banking Co. and Nippon Credit Bank Ltd, to forgive $1.4B that [it] owes them. Japanese banks have waived four other major contractors' debts out of concern that failures in the construction industry, which accounts for about [10% of the] nonagricultural jobs in Japan, could batter the broader economy. Mitsui sought help once before, in 1997, from affiliated companies in the Mitsui group.
    [Too bad CEOs in America and "experts" on Wall Street don't care about the effect of their decisions on the broader economy - let alone the long term.]

12/29/2000  2 bankruptcy stories -
  1. Montgomery Ward to close its doors, by Kaufman & Deutsch, NYT, C1.
    ...The company..\..once the greatest American retailer [now] owned by General Electric, \will\ go out of business after 128 years [and] close its 250 stores...the coming months. It filed for Chapter 11 bankruptcy court protection yesterday for a second and final time....
    [If it was final, why didn't it file for Chapter 7 liquidation?]
    The company is based in Chicago and now operates in 30 states.... Ward said the disappointing holiday season was the final straw. ...Said Roger Goddu, chairman and CEO in a statement, "Overall weak holiday sales and a very difficult retail environment simply did not permit us to complete the turnaround that might have been possible in an otherwise thriving economy." "It has been a slow-motion train wreck," said Sid Doolittle, a Chicago-based retail consultant who was an executive with the company for 28 years.
    In 1872 Aaron Montgomery Ward, a traveling dry goods salesman, started selling to farmers by mail through a one-page catalog list. By inventing the general merchandise mail-order catalog, Mr. Ward could keep prices low through bypassing the middlemen, like small-town shopkeepers and itinerant salesmen. Sears was not founded until 14 years later and its catalog came years later still.
    In 1875 Mr. Ward pioneered another practice now taken for granted - "satisfaction guaranteed or your money back." A decade later, Ward's [catalog] was 240 pages and the shopper's bible for America's rural folk. The company went public in 1919 and began opening its own stores in the next decade.... It was a Ward advertising writer who in 1939 wrote "Rudolph the Red-Nosed Reindeer" as an illustrated poem to hand out to children visiting Ward's Santa....
    [See also today's downsizings.]

  2. LTV says it may file for Chapter 11 protection, Bloomberg via NYT, C3.
    The LTV Corp. [which was] once a conglomerate stretching from aerospace to meatpacking, was winnowed down to predominantly a steel maker in the 1980's..\..said yesterday that it was close to a decision to file for Chapter 11...because it had nearly run out of money. The company told officials in Ohio, where it has several plants, that falling steel prices and 8 consecutive quarters of losses had pushed it to the brink of insolvency.... It went through a Chapter 11 reorganization in the early 1990's. It is considering filing again today in federal bankruptcy court in Youngstown, Ohio. Trading in [its] shares was halted at midday on the NYSE.
    [See also today's downsizings, and see actual filing above on 12/30 #1.]

12/28/2000  6 bankruptcy/liquidation stories -
  1. Founder of BabyStripes.com crafted site out of business, by Josh Hyatt, Boston Globe, E4.
    Where were you when the rules changed? That's the crucial question that struggling Internet entrepreneurs are asking themselves as 2000 sputters to a close....
    But for the founder of Newton [Mass.]-based BabyStripes.com, the experience is still too fresh to categorize. "We built a great company," says Larry Siff, who served as president and CEO of the short-lived e-retailer. "I am an extremely positive and determined individual and I do not give up easily." But give up he did. His site, which sold upscale baby gifts...was born in the fall of 1998 \and\ went live in April. In October, down came BabyStripes, $4m funding, and all.
    "It was a very hard decision to make," says Siff.... A year ago it would have been inconceivable that Siff's well-crafted venture....could have disappeared so abruptly. But by last summer, just around the time he happened to be looking for additional funding, investors had completely soured on Internet retailing. "We anticipated the bubble's bursting, but, well, not to the degree that it burst," Siff notes....
    "Larry was left with a pretty site and not enough customers," notes Jack Derby, president of Derby Mgmt, a Boston consulting firm.... "I could have raised more capital upfront, when anyone who had a blank piece of paper could get funding," reflects Siff....
    [See also today's downsizings.]

  2. Another dot-com fails: BizBuyer.com, by Beth Healy, Boston Globe, E8.
    ...A Santa Monica, Calif., company that handled online requests for quotes for businesses, will shut down. The company said it had $35m in cash, according to the VentureWire news service, but will return the money to investors because profitability was still far off. CMGI's @Ventures fund backed the company, as did Staples.com [boy were they stupid - "stick to your knitting" Staples!], Intel [ditto]. Redpoint Ventures, Morgan Stanley Dean Witter Ventures, and others....
    [See also today's downsizings.]

  3. Digital Broadband [Communications] files for Chapter 11 - DSL provider to go out of business by Jan. 12 , by Peter Howe, Boston Globe, E1.
    ...The 2-year-old startup [based in Waltham, Ma.], which landed a potentially lucrative contract to supply Internet access to Bay State schools and municipal buildings, said it found no buyers for its DSL business and no other "strategic alternatives" to stay in business. [The] bankruptcy filing...in a Delaware court..\..brought to a crashing end a year in which it looked like the company might use its state-supported DSL access program as a springboard to become a major local telecom provider....
    [See also today's downsizings.]

  4. Lernout again seeks protection - Firm says new case more 'elaborated', Bloomberg via Boston Globe, E5.
    BRUSSELS - Lernout & Hauspie Speech Products NV, a speech recognition software maker under investigation by U.S. regulators, said it filed a 2nd request yesterdaya to a Belgian commercial court for bankruptcy protection after the court rejected its previous application....

  5. Bilingual Web site, Quepasa.com, going out of business, AP via Boston Globe, E5.
    ...A bilingual website geared toward Hispanics..\..said yesterday it will liquidate its assets. ...Nasdaq halted trading of Quepasa.com Inc. yesterday. The stock last traded at 9 cents per share.... The Quepasa site includes a search engine, free e-mail, free webpages, Spanish language newsfeeds, chat rooms, games, maps and message boards..\.. Included in the liquidation are the Quepasa.com website and 3 wholly owned subsidiaries: RealEstateEspanol.com, shopping site Etrato.com and Credito.com. All of the sites will remain in operation during the liquidation.
    ...Despite heavy advertising and signing entertainer Gloria Estefan as a spokeswoman, Quepasa struggled in the shadow of more popular broad-interest portals such as AOL, Netscape and Yahoo. The company has been seeking a buyer since May.... "After carefully evaluating every option to maximize shareholder value over the past 9 months, our board...has determined that liquidation following the sale of our assets is the best way to maximize value and provide liquidity to our shareholders," Gary L. Trujillo, the company's chairman and CEO said in a news release. [However,] "What you're seeing out there in ad-supported Web media properties is companies that are getting sold are essentially getting sold for nothing,"...said..\..Glenn Powers, an analyst with...Roth Capital Partners....
    [See also today's downsizings.]

  6. Video chain buys stores in N.E., Bloomberg via Boston Globe, E8.
    Movie Gallery Inc. of Dothan, Ala. purchased nine stores in Maine, Conn., and Mass. from rival Video City Inc., which filed for Chapter 11 bankruptcy protection in August....

12/27/2000  2 bankruptcy stories -
  1. Bankruptcy is sought by Bradlees, Reuters via NYT, C4.
    The discount retailer [has] filed for bankruptcy protection after exploring several options to change its financial outlook, including a possible sale of the company. Bradlees, which is based in Braintree, Mass..reached an agreement to sell its inventory to a group led by Gordon Bros. Retail Partners of Boston. Bradlees...expected to retain store associates [i.e., sales clerks] through this process....

  2. Daewoo workers balking at retirement, Bloomberg via NYT, C4.
    SEOUL, South Korea...- Daewoo Motor, which was declared insolvent in November, is having difficulty proceeding with plans to shed production capacity because too few of the company's employees are accepting an early retirement offer.... Just 896 of Daewoo Motor's 20,000 employees, including 360 assembly workers, agreed to resign by Dec. 31 to qualify for early retirement packages...so the deadline will be extended for another week. Daewoo Motor's management and its workers are at odds over how to [delay] the company['s] shutdown long enough to attract a foreign buyer....

12/26/2000  1 bankruptcy story - 12/23/2000  5 bankruptcy mentions, total of $851m in debt mentioned -
  1. Judge rejects Coram Healthcare reorganization plan, Bloomberg via NYT, B3.
    A bankruptcy court judge has rejected the...plan filed by the Coram Healthcare Corp. and a related company, Coram Inc. with the support of lenders holding its principal debt.... The announcement did not cite a reason.... Coram sought protection in August because it could not make payments on $251m in debt due or redeemable in May 2001.

  2. October payments to retirement funds missed, Bloomberg via NYT, B3.
    Trans World Airlines Inc. [TWA] failed to make some payments to worker retirement funds in October and is trying to refinance a $100m loan as it enters the slow winter season with less cash than last year. ...The union representing machinists at TWA [is] considering taking legal action.... TWA had almost $600m in long-term debt outstanding on Sept. 30, with more than a third of it coming due this year and next, and has not posted an annual profit since 1988. It filed for Chapter 11...twice in the 1990's.

  3. Levitz set to emerge from Chapter 11 bankruptcy, Bloomberg via NYT, B3.
    ...on Dec. 31 under a plan approved by the court that would effectively combine it with a rival furniture retailer, the Seaman Furniture Co. The 2 chains will continue to operate separately, though many administrative functions [will] be shared, and Seaman will manage Levitz's stores on the East Coast....

  4. Outboard Marine makes bankruptcy filing, Reuters via NYT, B14.
    WAUKEGAN, Ill - ...A manufacturer of boats and boat motors [has] filed for reorganization under Chapter 11 of the Bankruptcy Code, just three years after the financier George Soros led a leveraged buyout of the company.
    [Thanks a million, George.]
    Under the plan, the company will sell some or all of its engine and boat operations.... It received...from its banks...financing sufficient to permit operations as it restructures.
    [See also our downsizing story about Outboard Marine today (12/23/2000).]

  5. Foreclosure of firm urged, Bloomberg via NYT, B3.
    ...BA Funding \is a\ partner [of] bankrupt...Portland, Maine-based BroadcastAmerica.com. \It is\ seeking to foreclose on the bankrupt company's assets [and] has asked a federal judge to consider liquidating the company...to use the assets...to pay creditors. The company filed for bankruptcy protection last month under Chapter 11, hoping to buy time to reorganize. But Richard Olson, BA Funding's lawyer, asked Judge James Haines to consider changing [the] filing to Chapter 7, which would effectively squelch any hopes the company had of surviving....
    [With "partners" like this, who needs competitors?]

12/22/2000  1 bankruptcy mention - 12/21/2000  2 bankruptcy mentions -
  1. Dimac wins approval for reorganization plan, Bloomberg via NYT, C4.
    ...A direct marketer...based in St. Louis [that] filed for Chapter 11 protection in April after failing to make interest payments on loans...said yesterday that it had won a judge's approval for a reorganization plan that would repay bank lenders 87 cents on the dollar for their claims and give unsecured lenders up to 40% of the company's reshuffled common stock, plus some preferred shares.

  2. Bankruptcy filings set record, Bloomberg via NYT, W1.
    The shoe retailer Marutomi Group filed for bankruptcy protection, the 12th publicly traded Japanese company to file in 2000 and a record for any year since World War II. Marutomi had been cutting costs since 1998 in an effort to stem losses as its sales declined.
    [Ed Deming is turning over in his grave. But now they need to go beyond his 14 Points for Management and share the vanishing work.]
12/20/2000  1 bankruptcy mention - 12/19/2000  6-in-1 insolvency story - 12/16/2000  1 liquidation story - 12/13/2000  3 bankruptcy mentions, with $?? debt -
  1. An unfair bankruptcy bill, editorial, NYT, A26.
    The Senate passed the same distorted bankruptcy bill last week that the House had passed earlier this year. The bill amounts to a handout to the credit card industry, whose heavy lobbying and huge campaign contributions guaranteed big victories in both houses. Pres. Clinton has promised to veto the bill, in part because it hits hard at poor debtors and leaves loopholes for sophisticated ones....

  2. Lernout & Hauspie continues its bankruptcy effort, Reuters via NYT, C4.
    ...The troubled [Brussels-based] voice-recognition software company [will] try again for bankruptcy-court protection in Belgium. It filed for Chapter 11...in the US last week and tried to get the Belgian equivalent, known as concordat, on Friday. But the court rejected its application [for having] too little information....

  3. More delays in Thai Petro case, Bloomberg via NYT, W1.
    A bankruptcy court delayed approval of a $3.8B debt-restructuring plan for Thai Petrochemical Industry after the company's CEO, Prachai Leophairatana, asked the Supreme Court to change the team of judges.... The Thai Petro case is seen as the..\..1999 Bankruptcy Law['s] first major test. Creditors have controlled the company since it was ruled insolvent in May.

12/09/2000  2 bankruptcy mentions, with $?? debt -
  1. Belgian court rejects Lernout & Hauspie bankruptcy petition, by Paul Meller, NYT, B2.
    ...the maker of speech-recognition software....
    [Mentioned below on 11/30/00, and not to be confused with the team that composed musicals in the 50s like the Sound of Music = Lerner & Lowe. This is the outfit that bought Dragon Systems - who supported Phil Hyde's 1996 shorter-worktime campaign vs. Joe Kennedy by donating a $400 speech-recognition software package & a toy dragon, and in return, got a number of plugs on the campaign trail.]

  2. Sogo chairman told to repay losses, AP via NYT, B2.
    A Tokyo court ordered the top executive of the Sogo Co., the bankrupt Japanese retailer, to pay Sogo $54.7m in damages for losses that he and other executives were accused of causing as the company was collapsing. Sogo filed for bankruptcy in July [see 7/13/2000 and the following 2 days] after the Japanese government balked at a plan to forgive $4.4B in Sogo's debts.
    [Unending attempts by the rich to get more - and from the government, i.e., the general, non-rich taxpayer??? And this is what we facetiously refer to as capitalism. This is hypocritical "capitalism for others, socialism for us."]
    Hiroo Mizushima...who ran Sogo for 38 years as president and later as chairman, denied any mismanagement....
    [See also our suicide page today (12/09/2000).]

12/08/2000  1 bankruptcy mention, with $?? debt - 12/07/2000  2 bankruptcy/failure mentions, with $101.7m + undisclosed debt -
  1. Armstrong World Industries seeks Chapter 11 protection, Bloomberg via NYT, C4.
    The...unit of Armstrong Holdings [has] become financially overwhelmed by asbestos-related personal injury claims that might reach $1.36B by 2006.... The parent company and other subsidiaries...were not included in the filing....
    [followup]
    Armstrong World Industries, 5/31/2003 NYT, B4.
    ...Lancaster PA, the nation's largest maker of vinyl flooring...won court permission to seek creditors' support for its bankruptcy recovery plan, which would create a $1.8B trust fund to resolve its asbestos litigation.

  2. Babygear.com closes its doors, NYT, C4.
    ...An Internet retailer of discount baby products has closed. The company, which...filed for Chapter 7 bankruptcy protection, becomes one of the latest additions to a growing list of electronic retailers that have foundered.... iVillage, the media website for women, sold its e-commerce division iBaby to Babygear in July.... Babygear...developed a reputation for poor customer service....
    [That would seem to be suicidal for a baby products retailer.]

12/06/2000  4 bankruptcy/failure mentions, with $101.7m + undisclosed debt -
  1. Maker of Con-Tact sticky paper files for bankruptcy, Bloomberg via NYT, C4.
    Decora Industries, an adhesives maker known for its...shelf paper filed for Chapter 11 bankruptcy court protection from creditors. The company, based in Fort Edward, NY, and its Decora Inc. unit listed [224.9-123.2= $101.7m net] debt.

  2. Petsmart.com buys Pets.com name, by Laurie Flynn, NYT, C8.
    Pets.com, the online pet store that announced last month it would shut down, has sold [its] domain name to its old rival....

  3. Altavista to end free Internet service, Reuters via NYT, C8.
    ...because 1stUp, its affiliate company that had provided that service is going out of business....

  4. An end to the perpetual upgrade, pointer digest (to C10), NYT, C1.
    Despite its limited schedule, Legend Airlines, the Dallas-based carrier that has filed for bankruptcy protection, proved an attractive alternative to fliers by offering coach fares with the equivalent of a perpetual first-class upgrade.

12/03/2000  1 business shutdown mentioned - 12/01/2000  1 bankruptcy mentioned - For earlier bankruptcy stories, click on the desired date -

  • Oct-Nov/00.
  • Jul-Sep/00.
  • Jan-Jun/2000.
  • Aug-Dec/1999.
  • 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.

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