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[Commentary] © 2001 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

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Bankruptcies, March-July/2001

7/31/2001  1 bankruptcy in NY Times (NYT) & Boston Globe (BG) -

• Promotional products company files for Chapter 11 , Bloomberg via NYT, C4.
  HA-LO Industries...based in Niles, Ill. \cites\ a series of losses and the acquisition of Starbelly.com....
  [Again, the lethal takeover-bankruptcy connection.]

• Trustee calls for Essential shutdown - Says Burlington firm is unlikely to survive despite Ch. 11 filing, by Bruce Mohl, BG, C1.
  Essential.com, the Burlington MA company that sells energy and telecomm services to some 1.4m customers in several states...quietly sought bankruptcy protection.... Court records indicate Essential filed...on June 29..\..for Chapter 11 [which] allows a company to continue operating....
  ["Court records" in Boston??? - big omission! - ]
  Bruce Mohl can be reached by e-mail at mohl@globe.com..\..
  [And here's another "small" omission, this time by the company -]
  ...Apparently [it] has not notified its customers of its filing.... The [bankruptcy] trustee working on the case, Gary L. Donahue, said in his filing that "the conversion of this case to Chapter 7 is necessary to prevent further diminution of the estate and to provide for an orderly wind-down of business operations." Since the June 29 filing, Donahue said, Essential had been unable to raise additional venture capital or find a buyer. As of July 18, he said, Essential had $1.7m in cash and $1.5m in accounts receivable [= total assets of $3.2m], but was consuming cash at a rate of $250,000 per week. He said Essential had $5.5m in unsecured debt....
  [So $3.2m assets minus $5.5m debt leaves them with $2.3m in the red, minus two weeks' worth of cash burn (0.25m x 2) for a total of 2.3+.5= $2.8m debt so far. And note a few days later, "Essential puts on fire sale - Offers list of customers for less than $1m as part of bankruptcy case," by Bruce Mohl, 8/02/2001 BG, C1. How nice for their 70,000 customers. Sold like slaves.]

• Huffy to acquire assets of ailing rival Schwinn/GT, AP via NYT, C4.
  ...Schwinn said it had filed for bankruptcy protection....

• Troubled Comdisco sells unit, by Laurie Flynn, NYT, C6.
  Comdisco Inc...whose primary focus is leasing computer equipment..\..said yesterday that it would file for bankruptcy protection [and] that 50 of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11, adding that it hopes to emerge from bankruptcy early next year. The company [is] based in Rosemont, Ill....
  [Followup - We learn on 1/04/2002 #1 that at $8.8B in assets, Comdisco was the 6th largest bankruptcy in 2001.]
  [More followup]
  Court approves Comdisco Chapter 11 recovery plan, Bloomberg via 7/31/2002 NYT, C4.
  [and]
  Comdisco is cleared to set date to end its bankruptcy case, Dow Jones via 8/01/2002 WSJ, B8.

• Vote shows support for bankruptcy bill - Personal bankruptcies hit a record 1.4m in 1998 but fell to 1.2m in 2000, AP via BG, C10.
  WASHINGTON - With the slumping economy bringing a surge in bankruptcy filings, the Senate yesterday took a procedural vote on a House-passed bill making it harder for people to wipe away their debts in court.
  Opponents say the legislation would remove a crucial safety net for people who have lost their jobs or face huge medical bills.
  The tally was 88-10 in the Democratic-controlled Senate to resume work on the sweeping overhaul of bankruptcy laws....
  [So much for the loveliness of the Democrats.]
  The legislation applies a new standard for determining whether people should be forced to repay their debts under a court-approved reorganization plan rather than having them dissolved. If a debtor is found to have sufficient income to repay at least 25% of the debt over five years, a reorganization plan generally would be required....
  Bankruptcy filings jumped 17.5% in the first three months of the year, the Administrative Office of the US Courts reported recently. Personal bankruptcies reached a record 1.4m in 1998, up more than 300% since 1980, but declined to about 1.3m in 1999 and 1.2m last year.

• An ambitious Internet grocer is out of both cash and ideas, by Saul Hansell, NYT, front page.
  Webvan [will] seek bankruptcy protection.... After spending almost all the $1.2B put up by investors, including some of the savviest in Silicon Valley...
  [What should that tell you about "Silicon Valley savvy."]
  ...Webvan ran out of money long before it could hope to turn a profit. Its search for a buyer or source of additional cash was fruitless. And its sales had started to spiral downward as it cut back on marketing....
  [It quickly happened, according to "Etc... Webvan Group Inc. filed for Chapter 11," 7/10/2001 BG, F1, published a few hours after the NYT, and again on Saturday, "Etc. - Webvan Group Inc., 7/14/2001 BG, F1, where we read, "The failed online grocer...filed for Chapter 11 bankruptcy protection, setting the stage for the sale of its remaining assets. Foster City CA-based Webvan announced that it filed its bankruptcy petition in Wilmington, Del., where the company is incorporated."  And meanwhile, stay tuned for more news from this direction, because on Friday we saw, with no explicit mention of bankruptcy, "Online grocer abruptly closes - HomeRuns.com stops taking orders, blames failure on cash crunch," by Stephanie Stoughton, 7/13/2001 BG, C1, which tells us, "Three days after the dramatic failure of online grocer Webvan, HomeRuns.com Inc. abruptly shut down its popular local {Boston & D.C.}delivery service...and pulled the shades down on its Web site.... In a terse statement, the privately held and publicity-shy {Burlington MA-based}company yesterday said...'HomeRun.com's efforts to raise the additional capital necessary to continue to run the business have been unsuccessful.... As a result, HomeRuns made the difficult decision {yesterday}to discontinue operating its online grocery business and will begin an orderly winding down of such operations.'... The same {investor}backlash also wiped out online grocers Webvan Group Inc., Streamline.com and Shoplink.com. {According to}Geri Spieler, research director for Gartner Inc. in San Jose CA, {the}outlook for the nascent business, now dominated by industry-backed players such as Peapod Inc., is far from optimistic.... Chicago-based Peapod will be the only online grocer of significant size delivering in the Boston market. Peapod is backed by Stop & Shop parent Royal Ahold NV, a Dutch conglomerate that has promised to continue backing the service.... Although Peapod overlaps most of HomeRuns.com's delivery territory, some pockets are not covered.... HomeRuns.com...served over 30,000 households in the Boston area.... In a rare interview in March, Robert J. Tarr Jr., the company's CEO, acknowledged...'If there was one mistake I made, it was not seeing the deflation of the capital markets as quick as it happened.... The markets are terrible.'"]

• Broadband2Wireless files for Ch. 7 - Sales, investment said to be lagging, by Peter Howe, BG, E3.
  ...An Internet access provider that once dreamed of blanketing Boston and other US cities with high-speed wireless coverage got clearance this week to auction off assets after it filed for Chapter 7 bankruptcy protection....
  [With "protection" like this, who needs Jack Kevorkian.]
  Companies file under Chapter 7 of US bankruptcy law if they plan to liquidate, while Chapter 11 typically is used by companies that hope to reorganize their debts and remain in business.
  ..\..Several people close to the company said it failed to sign up enough customers to quickly enough to land a crucial $20m round of venture capital funding.

7/03/2001  2 bankruptcies reported in NY Times (NYT) & Boston Globe (BG) -

1. Metricom files for bankruptcy protection, by Simon Romero, NYT, C6.
   ...The move by the company, based in San Jose, Calif..\..which operates the Ricochet high-speed wireless Internet service...underscor[ed] difficulties in what had been the much-vaunted mobile Internet industry....

2. Foster & Gallagher Inc., NYT, C4.
   Grand Rapids, Mich., sought Chapter 11 bankruptcy protection days after the privately held catalog and Internet retailer announced it will fire substantial part of its work force.

• Parent of Greyhound Line seeks bankruptcy in U.S. [Ch.11] & Canada, Reuters, NYT, W1.
  Laidlaw Inc., the operator of school buses and the parent of the Greyhound bus lines [is] seeking bankruptcy protection as it struggles with a huge debt load.... Laidlaw has struggled for several years to restructure its $3.5B debt, which it accumulated in an aggressive but unsuccessful expansion of its hazardous waste management business.... What hurt the company most was its purchase in 1998 of a hazardous waste management company, the Safety-Kleen Corp. of S.C..\.. Although Laidlaw is based in Burlington, Ontario, the company does 90% of its business in the U.S....
  [And now, the fatal takeover-bankruptcy connection. Associated in the bankruptcy are Laidlaw USA, Laidlaw Investments, Laidlaw International Finance, Laidlaw Transportation, and Laidlaw One, per 1/31/2003 WSJ, B5.]
  [Followup -]
  Judge approves Laidlaw's plan to emerge from bankruptcy, Bloomberg via 2/28/2003 NYT, C2.
  [They do like doing things at the end of the month.]
  [More followup -]
  Greyhound names president and chief executive, Reuters via 6/26/2003 NYT, C4.
  ...Since 1999 Greyhound has been a unit of Laidlaw International of Canada, which emerged from Chapter 11 bankruptcy protection of Monday [6/23]. Greyhound was not included in the bankruptcy filing.

• Newport Creamery files for bankruptcy, by Isaac Baker, BG, F3.
  ...in Tampa, Fla., the legal headquarters of the chain, follow[ing] six store closures of money-losing outlets in the last month..\.. The Rhode Island [R.I.] restaurant chain, known throughout New England [N.E.] for its ice cream and Awful milk shakes...will continue to operate about 40 restaurants in Mass., Conn. and R.I. as it moves to reorganize the company under court supervision.... The company does not plan to lay off any of its 3,000 employees....

• AK Steel Holding Co., NYT, C4.
  ...Middletown, Ohio, the largest maker of automotive steel, has agreed to buy Alpha Tube, Walbridge, Ohio, the bankrupt welding-tube unit of Acme Metals Inc., Riverdale, Ill., the smallest integrated steel maker in the United States....

• Big music company buys Latin label, Reuters via NYT, C8.
  Universal Music Group, the world's biggest music company...bought the assets of RMM Records.... The sale has been approved as part of a Chapter 11 bankruptcy proceeding....

• Wolf Camera seen filing for Ch. 11, Atlanta Journal-Constitution (AJC) website via AP via BG, C2.
  ...An Atlanta-based chain that is one of the nation's top photo retailers...blamed...the 1998 acquisition of the Fox Photo chain from Eastman Kodak, which left Wolf financially overexposed.
  [And not to put too fine a point on it -]
  Chuck Wolf, who founded the chain in 1974, told the AJC that the purchase of CPI/Fox Photo was a mistake and is the primary reason for the chain's problems.
  [In the future we'll probably just cut the crap and ban takeovers. CEOs are too frequently too stupid to handle them without long-term or short-term (as here) suicidal repercussions, not to mention their leprous effect on the economy.]

• Britain: Insurer forced to close, by Alan Cowell, NYT, W1.
  Independent Insurance...whose market value stood at $1.4B at the beginning of the year said it would liquidate because of unidentified losses....

1. Vlasic Foods International, maker of pickles, files bankruptcy plan, Bloomberg via NYT, B3.
   ...the nation's leading pickle maker....
   [Gawd, if the Nation's Leading Pickle Maker can't make it, we're in deep kimshee!]

2. Learning Network files for Chapter 11, Bloomberg via NYT, B4.
   Caliber Learning Network Inc., the online training provider backed by Sylvan Learning Systems Inc.,...because of continuing losses and mounting debts....

6/12/2001  1 bankruptcy & 1 bankrupt bill report -

• Stellex Technologies Inc. files bankruptcy recovery plan, Bloomberg via NYT, C15.
  ...that the...aerospace and military contractor says will enable it to emerge from Chapter 11 as an independent company.... The company...based in Florham Park, NJ..\..filed in September....
  [But was unreported then in the NY Times.]

• Bill to tighten bankruptcy gets a push - Democratic Senate helps break a logjam, by Philip Shenon, NYT, C1.
  ...a result both of the Democratic takeover of the Senate and a renewed lobbying campaign for the bill by banks and credit card companies.... [Another area where Democrats are no damn different from Republicans. Current bankruptcy "leniency" was learned the hard way in the early Depression and now near-sighted bankers want to make it tough again. That way lies another depression, with dead banks strewn all over the landscape. How do we know? Cast your eye over to the top left of this NYT page (C1) and you see -]
  More people falling behind on mortgage payments, pointer digest (to front page), NYT, C1.
  With energy costs and unemployment rising, the number of Americans who are behind on their mortgage payments has risen sharply in the last year. The increase in the delinquency rate is particularly worrisome, analysts say, because it suggests many of the new homeowners who benefited from more liberal lending standards may not be able to afford their mortgages during slow economic times.
  [And now these morons want to bring back bucket shops (via single-stock futures - see 6/30/2000), tighten bankruptcy and loosen banking (they've already repealed the Glass-Steagall Banking Act which separated banking, brokerage and insurance and stopped the Great Depression from getting worse). "We couldn't be ruining this country faster if we were doing it on purpose!"]

1. Payless Cashways files for Chapter 11 protection, AP via NYT, C4.
   ...after the company's decision last month to lay off hundreds of employees and close 19 stores. Payless, based in Lee's Summit, Mo., sells building materials and finishing products.... Millard Barron, the president and CEO, blamed poor economic conditions and an unusually harsh winter that led to lower-than-expected sales.

2. Marketing Specialists Corp. fires most of its 5,700 workers, by Ross Kerber, BG, D2.
   Food broker...laid off the majority of its...employees...following a Chapter 11 bankruptcy filing last month...May 24..\.. Marketing Specialists, now based in Dallas, never achieved the efficiencies its founders had hoped for....

1. PSINet, Internet concern, files for Chapter 11, AP via NYT, B3.
   ...Internet communications provider...based in Ashburn, NY...had total assets of $2.2B and total liabilities of $4.3B.
   [Giving us a debt of $2.1B.]

2. Etc.- Artificial Life Inc., Globe staff & wire services, Boston Globe, C1.
   ...a money-losing software developer...shut its Russian offices and is seeking bankruptcy protection for units in Germany and Switzerland....

• Baldwin Piano & Organ Co., NYT, C4.
  ...Mason, Ohio, the 140-yr-old piano maker which earlier this month reported that its first-quarter loss more than doubled from a year ago, [will] file for Chapter 11 bankruptcy protection.

• Australian phone upstart declared insolvent - Big-name backers of One.Tel say they were misled, by Becky Gaylord, NYT, W1.
  SYDNEY, Australia...- The future of One.Tel, an upstart Australian telecommunications company heavily backed by sons of the media magnates Rupert Murdoch and Kerry Packer, was thrown into doubt when auditor unexpectedly declared it insolvent....

• Bankruptcies by individuals rise sharply so far in 2001, by Riva Atlas, NYT, C12.
  A weakening economy and the anticipated passage of a [tough] bankruptcy "reform" bill in Washington [our quotes - ed.] caused a spike in the number of individuals filing for bankruptcy in the first quarter, according to an analysis of federal statistics released yesterday....
  "A lot of the pressure has come from the loss of jobs," said Elizabeth Warren, a professor at Harvard Law School and an expert on bankruptcies. "With families already deeply in debt, it doesn't take much for them to tumble into bankruptcy."
  [Ah, Elizabeth, make that sound like sooo much fun. Let's just have a "tumble" into bankruptcy.]
  There were 366,841..\..personal and business...bankruptcy filings in the first quarter, according to..\.. the Administrative Office of the U.S. Courts..., an 18% increase from the period a year earlier \and\ the highest in any quarter since June 1998, according to statistics from the Administrative Office.... Most of that increase resulted from individual bankruptcy filings.... Individuals filing for Chapter 13...were up 21%.
  ...[So far in the second quarter,] personal bankruptcy filings have slowed some, according to weekly data collected on behalf of the credit card industry by E. Christopher Lundquist, president of Lundquist Consulting. In March and [early] April, there were as many as 37,000 filings a week, he said. In the last five weeks [late April and so far in May] that number has fallen to about 30,000 a week. But based on data through last week, filings are [still] up 26% from the [second quarter?] last year, Mr. Lundquist said. The number of filings has dipped slightly as some of the urgency behind the passage [through the House and Senate in March of the tougher] bankruptcy legislation has faded, Mr. Lundquist said. The House and Senate have yet to begin reconciling the differences between their bills [and] until those differences are reconciled, the bill cannot be sent to "Pres." Bush to sign [our quotes]. Today's expected decision by Sen. James M. Jeffords of Vermont to leave the Republican Party, giving the Democrats a majority in the Senate, might further delay passage of the legislation....
  [Here's hoping.]

• Teligent files for bankruptcy protection, by Simon Romero, NYT, C7.
  ...yesterday, becoming the latest company to succumb to the austere financing climate for smaller companies.
  [Aha, another hallmark of 1928 = "austere financing climate for smaller companies." Boston Globe says Teligent took good ol' Chapter 11.]
  Teligent, which sought to compete with large local telephone companies by providing wireless communications services using rooftop antennas, failed to meet a deadline yesterday for obtaining $350m in short-term financing.... The company, based in Vienna, Va., has never reported a profit since it first sold shares in 1997.
  [Sounds like Individual Inc. in '97 - no profit since the '80s. Sounds like Amazon.com. Sounds like many many dot-coms. See also Teligent's downsizing on 5/12/2001.]

• Retailer Casual Male filing for Chapter 11, by Chris Reidy, BG, C1.
  ...in New York \because of\ a high level of debt and its inability to secure additional financing.... The statement listed the company's assets at $299m and its liabilities at $244m as of Feb. 3.... Last fall...the company was still known as J. Baker Inc....

1. Dot-com's customers in limbo - CyberRebate files for Chap. 11, holds $80m owed to users, by Bruce Mohl, BG, E1.
   About 200,000 consumers were reeling yesterday from the bankruptcy filing of...a popular Web site that promised its customerss free merchandise if they were willing to pay an inflated price up front and then wait three months for a full rebate check....
   [Suckers can't tell a pyramid scheme when they see one.]
   CyberRebate.com...based in Cedarhurst, NY, reported [total] liabilities of approximately $100m....

2. Tandycrafts files for Chapter 11 as refinancing fails, AP via NYT, C4.
   ...The home-decor retailer has filed...after it failed to refinance its debt or get an extension on its credit.... The company, based in Fort Worth...listed $64m in assets and nearly $53.4m in liabilities.

• Zany Brainy, educational toy chain, files Chapter 11, AP via NYT, C4.

• A leading construction company files for Chapter 11, by Michael Brick, NYT, C4.
  The Washington Group International...which is based in Boise, Idaho..\..one of the nation's largest construction companies...said it would continue to operate and pay its workers....

1. Battered by the economy, Hook Media, an online agency, files for bankruptcy protection, by Stuart Elliott, NYT, C6.
   ...under Chapter 11..\..and is preparing to sell most of its assets to a division of Havas Advertising....

2. Battered by the economy..., by Stuart Elliott, NYT, C6.
   ...the Worldwide Xceed Group, a Web designer in New York, filed for federal bankruptcy protection..\..on Monday [and] sold the assets of two offices, in Chandler, Ariz. and Colorado Springs....

1. American Appliance files for Chapter 11 bankruptcy, AP via NYT, C4.
   ...a regional appliance and consumer electronics chain [with] 24 stores in NJ, Pa., and Del..\..that closed it s stores abruptly last week....

2. MarchFirst to liquidate after asset sales failed - The end comes for an Internet consultant dealt a series of blows, Reuters via NYT, C7 (& C4, shorter version).
   [We've mentioned Chicago-based MarchFirst's bankruptcy repeatedly in the past (e.g., 4/13 below) but we're assuming this is a step to yet deeper oblivion.]
   ......it obtained an order last week...converting its Chapter 11...filing for reorganization into a Chapter 7 filing for liquidation. Chap.11 allows a company to run its [own] business, while Chap.7 puts an [outside] trustee in charge....

• New Zealand line fails, and Qantas tries to fill gap, by Becky Gaylord, NYT, W1.
  As if April had not been a cruel enough month ["April is the cruellest month, breeding | Lilacs in a dull land...." T.S. Eliot, The Wasteland] for Australian airlines and their customers [see end of excerpt], Qantas Airways Ltd. now finds itself having to clean up after the collapse of a New Zealand carrier that had licensed its name. Qantas said it had sent aircraft to New Zealand and was improvising a schedule of flights among Auckland, Wellington and Christchurch to minimize the disruption for passengers caused by the failure of Qantas New Zealand, a unit of Tasman Pacific Airlines, which abruptly stopped flying last weekend.
  [No explanation given.]
  Qantas Airways has no ownership stake in Qantas New Zealand, but since its good name is on the line, "we're going to honor the tickets" issued by the defunct carrier, Michael Sharp, a Qantas Airways spokesman, said in Sydney.
  [So the honor of the Big Down Under is going to bail out the unexplained collapse of the Little Down Under.]
  Just last week, Qantas' Airways own main domestic rival, Ansett Australia, won a reprieve from a government threat to lift its license over repeated maintenance and safety problems. It promised to upgrade its fleet and change its practices.

1. Gerald Stevens Inc., NYT, C4.
   ...Fort Lauderdale, Fla., a leading marketer of floral products [will] file voluntary Chapter 11 bankruptcy petitions.

2. Hub Local 254 placed in receivership, by Diane Lewis, Boston Globe, D5.
   The Service Employees International Union has placed a Boston local in receivership following the suspension of its business manager for illegally driving a union car after the revocation of his license....

• Winstar [Communications] files for bankruptcy, by Simon Romero, NYT, C4.
  ...yesterday...
  [OK, now we move on to the truly bizarre part of the story -]
  ...and said it was suing its largest creditor, Lucent Technologies, for $10B, after Winstar ran short of financing for the expansion of its wireless communications network.
  [Talk about "biting the hand that feeds"!]
  Winstar said in a statement that its business had suffered after Lucent declined to provide the company with $90m of financing last month.
  [Ah, poor baby. If some stupid judge favors this suit, no amount of interest-rate reduction will tease out investment.]
  A Lucent spokeswoman said the lawsuit was "without an ounce of merit." Lucent had provided Winstar with about $700m of credit to buy its products as part of Lucent's largest vendor-financing deal, valued at $2B.
  [So. Give 'em less than $1B's worth of credit worth $2B at retail and the SOBs sue you for $10B when you won't send more good money after bad. Boy, some CEO's are spray-painted a dark shade of Out-of-touch Arrogance. Of course, if this article has not told us something crucial about a contractual agreement to provide more financing, all bets are off.]

Shuttle America seeks bankruptcy protection - Airline says Chapter 11 filing won't affect its current schedule, by Ross Kerber, BG, F1.
...A closely held start-up based in Windsor Locks, Conn...filing...in Hartford...said airline is operating profitably. But the cost of expansion projects such as the purchase of several new regional jets, at around $20m apiece, is too high for the airline to finance without restructuring its debt of about $18m.... Bankruptcy protection should simplify those talks..\..Shuttle America CEO David Hackett...said, and help attract new investors....
[Isn't this a bit like doing layoffs when you're in profit? Doesn't this guy have any other ways of "simplifying those talks" without declaring bankruptcy? Why do we always need "new investors"? - sounds like a pyramid scheme. These morons are recreating the Hyksos Period - the period of chaos in ancient Egypt, or the time of Stephen and Matilda in England when, according to one of the last entries in the Domesday Book, it was like "all the demons in hell were loose in the land." Here's hoping we don't have to fly to Buffalo or Trenton.]

1. AMF unit plans to file for bankruptcy protection, Reuters via NYT, C4.
   The CEO of AMF Bowling, the world's largest bowling alley operator, said yesterday that its AMF Bowling Worldwide unit would probably file...while continuing to restructure its $1.3B debt load....
   [Done, according to "AMF Bowling files for bankruptcy protection," Reuters via 7/04/2001 NYT, C4. And then we have "AMF Bowling Inc. {Richmond, Va., filed for bankruptcy protection yesterday, just weeks after its subsidiary, AMF Bowling Worldwide, did the same}, 8/01/2001 NYT, C4." ]

2. Tenet Healthcare buys its 5th hospital in Atlanta area, Reuters via NYT, C4.
   ...The South Fulton Medical Center...has been operating under Chapter 11 bankruptcy protection.

3. Track 'n Trail, NYT, C4.
   ...El Dorado Hills, Calif., a footwear retailer, filed for Chapter 11....
   [Guess they didn't find El Dorado in them Hills.]

4. Vision Metals, Inc., et al.,, bankruptcy notice, NYT, C9.
   ...Chapter 11..\..District of Delaware....

• Etc.- ...Biddeford Textile, Globe staff & wire services, BG, C1.
  ...In early March, it filed for protection from creditors under Chapter 11 of the bankruptcy code. \Recently\ a bankruptcy judge gave final approval to a $50m supply agreement...setting the stage for the blanket mill to resume production....

• Internet consultant files for Chapter 11 protection, Reuters via NYT, C3.
  MarchFirst Inc...has filed...according to the Delaware bankruptcy court clerk's office....
  [At last! They've been hemorrhaging jobs forever.]
  Its creditors numbers more than 1,000 parties....

• Bankruptcies up sharply in Massachusetts, by Dolores Kong, Boston Globe, front page.
  ...for the first time in three years during the first quarter of 2001, an indication that both a slowing economy and the likely passage of more-restrictive bankruptcy laws may be driving more people to file.
  About 4,700 bankruptcy petitions were filed in the state during the first three months of the year, up more than 14% over the same period a year ago, according to raw data compiled last week by the US Bankruptcy Court's Massachusetts district.... The numbers are for both business and personal bankruptcies, but personal cases make up about 97% of filings....

1. California's largest utility files for bankruptcy, by Laura Holson, NYT, front page.
   The Pacific Gas & Electric Co [PG&E]...Chapter 11...declaring that politicians and regulators had not moved quickly enough to resolve an energy crisis that has caused periodic rolling blackouts and is costing the state billions of dollars.... The filing...shifts decision-making about crucial aspects of the California energy debacle from officials in Sacramento, the state capital, to a federal bankruptcy court in San Francisco, where PG&E has its HQ.
   The utility hopes to have more success in court in trying to win relief from $9B in wholesale energy debt it says it has incurred since prices began soaring last May. Legislators and regulators have been loath to bail out PG&E or the No. 2 utility, Southern California Edison, whose billions in debt to wholesalers and marketers stem from flawed state deregulation that did not allow the utilities to pass on rising costs to consumers....

2. Goldings' law firm files for Chapter 11 - Decision follows failed settlement talks - Partners will continue providing services and plan to emerge from the reorganization intact, by Kimberly Blanton, BG, C1.
   Mahoney Hawkes LLP yesterday filed..., a response to lawsuits by former clients and business associates of Morris Goldings who allege that $13m entrusted to Goldings for legal work in recent years disappeared.... a significant setback to the well-known firm that founded 40 years ago by Goldings and prospered as a midsize niche firm in Boston's legal community.... Goldings...is being investigated by the FBI....

3. Ursus Telecom and its Access Authority unit file bankruptcy, Reuters via NYT, B3.
   The international long-distance carrier...said yesterday that it and its Access Authority Inc. unit had filed for Chapter 11 [which] frees a company from the threat of creditors' lawsuits while it reorganizes its finances.

4. and 5.  Nursing homes squeezed by costs - Operators blame Medicaid payments, by Anne Barnard, BG, front page.
   Three more Massachusetts nursing homes [Salisbury Nursing & Rehabilitation Center and Wayside Center Nursing Home in Worcester, and the third one unnamed in the entire article] announced this week that they plan to close their doors, bringing to 53 the number of facilities shuttered since the beginning of 1999 and spotlighting the industry's distress over high operating costs and government reimbursements that do not cover expenses.... The announcement of three closures in a single week raised the specter of possible bed shortages in a state that had a surplus of nursing homes three years ago..\..
   Stephen Flanagan, administrator [at] the Salisbury...said the state repays him $104 per day to care for Medicaid patients, while the care costs $124.... "The bills are paid.... But the owners have been putting hundreds of thousands of dollars into it every year just to keep the place open," he said....

1. Taunton [Mass.] company files Ch.11 petition, Dow Jones via BG, D5.
   Advanced Deposition Technologies Inc. filed a voluntary petition...in District Court in Boston.... The company attributed the bankruptcy filing in part to actions taken or anticipated by the Bank of Canada against it....
   [Go, Canada! "No more Mr. Nice Guy!"]

2. Home exemptions snag bankruptcy bill, by Philip Shenon, NYT, front page.
   The life of the onetime corporate raider Paul A. Bilzerian would seem to be a shambles right now. He declared bankruptcy in Florida in January, listing $140m in debts...but at least [he has] someplace to go home to. In Florida...state law allows debtors to shield their homes from creditors, even multimillion-dollar mansions. And for Mr. Bilzerian, home is a $5 million, 11-bedroom, 36,000-square-foot estate, the largest private residence in the Tampa Bay area, complete with indoor basketball court, movie theater, nine-car garage and its own elevator.... The...unlimited homestead exemption also exists in Texas [as in "Bush country"], Iowa, Kansas, and South Dakota....
   But the practice is under threat by a bill pending in Congress to overhaul the nation's bankruptcy system, and lawmakers from those states have gone on the attack. To dismay of credit card companies, banks and retailers that have lobbied for years to make it harder for people to escape their debts in bankruptcy, the debate over the homestead exemption is now threatening to derail the bill.
   [We LOVE it. The greedy rich face off against the shyster rich. And there's more -]
   The issue has the potential to embarrass the White House. While President Bush has been an avid supporter of a bankruptcy overhaul [siding with the greedy rich], he was also a passionate defender of the unlimited homestead exemption when he was governor of Texas [siding with the shyster rich]....
   [(Unison voices from off-stage, dripping with unctuousness:) "Our hearts go out to him in this, his time of inner turmoil."]

• Saloon looks to bankruptcy to stay open, by Leslie Eaton, NYT, A20.
  P. J. Clarke's, the East Side saloon that for almost a century has fed and watered the rich, the famous and the very thirsty...known for its cheeseburgers and its clientele - Frank Sinatra, Aristotle Onassis, Louis Armstrong..\..filed for bankruptcy protection on Monday....

1. Grace files for Chapter 11, citing costs of asbestos suits, by Brick & Milford, NYT, C2.
   W.R. Grace & Co., a distributor of chemicals and building materials, filed yesterday for...bankruptcy protection.... The Chapter 11 filing by the company, based in Columbia, Md., excludes its foreign subsidiaries.
   [To whom it has probably transferred everything of value.]
   Grace listed assets of $2.51B and liabilities of $2.57B in its...filing in Wilmington, Del..=\..
   [Giving it a listed debt of .06B = $60m.]
   Since 1982, 26 large asbestos companies have filed for bankruptcy protection....
   [Now if we could only get rid of the cigarette companies, and the handgun companies and quit making money on addiction and death....]

2. Etc. - Ozer Group, Globe staff and wire services, BG, C10.
   ...plans to...auction...the brand name and intellectual property rights of Nevada Bob's Golf Inc., a Toronto retail chain that filed for bankruptcy protection last year.
   [But unreported in NYT or BG then, so we're counting it now.]

3. Workplace: Employee debts may keep employers up nights, too, by Sherwood Ross, Reuters 20:01 04-02-01 via AOLNews.
   When employers can't concentrate on work because of their credit card debt, employers may be smart to start worrying, too. With credit card debt and bankruptcies soaring, there's a thunderstorm of financial misery drenching millions of American workers - and its residual damage is seeping into the workplace.
   Total consumer debt in America is now over $1.4 trillion, up from $900 billion in 1994.  A reflection of this debt will be the 1.5 million bankruptcies expected to be declared this year - a 25% increase over 2000....
   Tom Garman, distinguished scholar at the InCharge Institute of Orlando, Fla...noted that 40% of the population are making car payments and that more than 50% are making monthly credit card payments.... According to the Federal Reserve Board, in January consumer credit grew at an annual rate of 12.5%, suggesting that people are borrowing ever more heavily..\.. Some lending institutions today charge interest rates high enough to make a loan shark blush. "Some people are paying as much as 30% interest rates to Visa," said Garman....
   [And the shift from one annual $29 fee to late fees of $29/mon. don't help.]

3/22/2001  1 bankruptcy in NYT or Boston Globe (BG) -

• Holt Group Inc., NYT, C4.
  ...Gloucester City, NY, a marine transport company, filed for Chapter 11 bankruptcy protection from creditors after it failed to make an interest payment on $140m in bonds earlier this year.

• Speak magazine makes a quiet exit, by Michael Prager, BG, F3.
  ...Every day, success becomes even more about hype and self-promotion than about quality. The latest proof of this condition shouts from the pages of Speak magazine, a pop culture quarterly out of San Francisco that is breathing its last on the few newsstands where you can find it....

• Imperial Home Decor Group, NYT, C4.
  ...Beechwood, Ohio, which makes wallpaper, won court approval of its Chapter 11 reorganization plan, clearing the way for it to emerge from bankruptcy in March or April. The plan was designed to help wipe out nearly $550m in debt, court papers said.
  [This bankruptcy was unreported in NYT or BG till now.]

• Lids moves to sell assets, by Chris Reidy, BG, C1.
  Lids Corp., a Westwood MA chain of sports-cap stores...sought bankruptcy protection in January....
  [which was unreported in the Globe till now. Further info in today's takeovers and downsizings.]

1. Star Telecommunications, NYT, C4.
   ...Santa Barbara, Calif., has filed for Chapter 11 bankruptcy protection, days after Nasdaq halted trading in the company's stock pending "additional information."

2. Reebok International, NYT, C4.
   ...Canton, Mass., has bought the operating assets of LogoAthletic, Indianapolis for about $13.8m. LogoAthletic markets apparel adorned with professional and college team emblems. It filed for Chapter 11 protection in November, received approval last week from a federal bankruptcy judge in Delaware, and the sale closed Friday.

3. How [bankruptcy] bill in Senate would add hurdles to erasing of debt, by Philip Shenon, NYT, front page.
   WASHINGTON...- For many Americans among the more than one million debtors whose financial troubles are expected to drive them into bankruptcy next year, the route to a fresh financial start will be far more complicated under a bill that is now before the Senate and appears likely to become law.... For many debtors, the idea that bankruptcy offers a true, fresh start would disappear. After emerging from bankruptcy, they would still be responsible for paying off some of their unsecured debts, even if that meant dividindg their paychecks between the old crediti-card bills and current child-support payments, alimony and other court-enforced obligations. The bill has been endorsed by "President" Bush [our italics - ed.] and is being championed by the credit-card and banking industries.... During last year's election campaign, they backed up their lobbying effort with millions of dollars in political contributions to key members of Congress and with some of the largest corporate donations to Mr. Bush....

1. Fas Mart Convenience Stores Inc., NYT, B3.
   ...Richmond, Va...filed for Chapter 11 bankruptcy protection to restructure its debt, citing slumping margins in the gasoline business. All of Fas Mart's 170-plus stores will remain open...and none of its 1,600 employees will be laid off.

2. South Korea contractor is ordered to liquidate, by Don Kirk, NYT, B2.
   SEOUL...- In a sign of a toughening stance against deeply indebted companies, a court today ordered the liquidation of the Dong Ah Construction Co., a major international contractor and South Korea's second largest behind Hyundai Engineering & Construction. The court rejected a proposal by the company that it be put into receivership instead....
   One immediate effect of the ruling was that it could jeopardize the completion of Dong Ah's 130 construction projects around the world, most notably a large waterway project in Libya, from which the company hoped to reap $10B.... Dong Ah's demise was seen as a result of reckless expansion and overspending int hte 1990's....

• Bill to restrict bankruptcies may lead to surge in filings, by Riva Atlas, NYT, front page.
  As legislation to tighten the rules for filing for bankruptcy gathers momentum in Congress, consumers facing a financial squeeze are being advised to act sooner rather than later. Lawyers say they are cautioning clients not to delay.... "It would be imprudent not to advise people that the legislation will make the process more cumbersome," David Shaev, a consumer bankruptcy lawyer in Manhattan, said....

1. Finova Group files for bankruptcy protection, Reuters via NYT, C4.
   ...Chapter 11...Wilmington, Del..\..as part of a planned takeover by Berkshire Hathaway.... The bankruptcy is one of the nation's largest ever, with Finova and eight of its operating units listing $11.4B in liabilities and $12.5B in assets....
   [Hell, that's nuthin'. When the Japanese go bankrupt these days, they go for $43B in straight liabilities (10/22/2000).]

2. EToys files for bankruptcy, AP via NYT, C4.
   ...Wilmington, Del...
   [They must have bankruptcy laws as loose as Liberia's inspections for licensing oil tankers.]
   ...as of Dec. 31...assets $416.9m...debts $285m. But...debts now far exceed assets....

3. [Our "democratic" leaders shove us further toward the Third World -]
   Senate rejects medical shield in bankruptcy, AP via NYT, C4.
   WASHINGTON...- The Senate voted [yester]day not to allow people seeking bankruptcy protection because of huge medical bills to have a better chance of erasing their debts in court than consumers filing for other reasons.
   Senators voted 65 to 34 to reject the exemption for medical debts from sweeping bankruptcy legislation...that has been pushed by the banking, credit card and retail credit industries \and\ that would force many consumers to repay their credit card and other debts eventually, rather than have them dissolved.
   [So let's see. They reduce Medicaid, and hospitals and nursing homes all over the land go broke. People with little money start putting their catastrophic medical bills on their credit cards. They toughen up bankruptcy including for catastrophic medical bills and people go into debt for life. Why not cut to the chase and reinstitute debtors' prison? Hey, why not go all the way and repeal the abolition of slavery (13th Amendment to the Constitution of the "Land of the Free")? - we've got a lot of it operating in the garment industry in Los Angeles already anyway - those charming women from Burma and Thailand who deny everything. Hey, Dubya, here's Kate's suggestion - why not keep it simple and instead of tougher bankruptcy and taxcuts for the rich, just make us each pay the wealthy $100 - it'll apparently mean sooo much to them. Or just do an omnibus bill - "We hereby revoke and rescind all the outdated legislation of the 1930s that we learned the hard way from the onset of the Depression itself, whether in banking or employment or social security or anything, because we believe the economy is sound and on a permanently prosperous plateau, like a vast infinite ocean that will take any amount of pollution, and as we all know, 'the solution to pollution is dilution,' never mind 'the tragedy of the commons.'"]
   It was the first Senate vote related to the bankruptcy legislation, which overwhelmingly passed the House last Thursday.... The amendment exempting medical debts was proposed by Senator Paul Wellstone of Minnesota...a leading opponent of the bankruptcy legislation. "We know that in the vast majority of cases, bankruptcy is a drastic step taken by families in desperate financial circumstances and overburdened by debt," Mr. Wellstone said before the vote. "We know that nearly half of all debtors report that high medical costs forced them into bankruptcy. This is an especially serious problem for the elderly."
   [So are the Dems going to have the smarts to run this guy for prez next time or are they going to keep screwing around with Clinton-cluttered Gore?]
   A study published last May found that huge medical bills played a significant role in personal bankruptcies, accounting for about 40% of the filings in 1999. About 500,000 Americans filed for bankruptcy protection in 1999 at least in part because of heavy medical expenses, according to the study. The financial misfortune can befall people with health insurance as well as the uninsured because some insurance policies are inadequate.... The study also found that elderly Americans and women, as well as families headed by single women, were the groups in bankruptcy hardest hit by medical expenses....

• Abe Gosman files for personal bankruptcy - Family was once worth $470m, by Beth Healy, BG, D3.
  [Does this give you a hint about where our Medicare money was going?]
  Abe Gosman, a businessman who made a fortune on nursing homes and assisted-living facilities in the 1980s and early 1990s, [made] a voluntary filing..\..for personal bankruptcy protection...in US Bankruptcy Court in West Palm Beach FL..\..on Monday.... Gosman moved to Palm Beach from Boston in 1989 and lives in a 64,000-square-foot mansion there.... In October..\..the Palm Beach Post...reported that Gosman had spent $7m on six acres of undeveloped land on Blossom Way, known by some as "Billionaires Row"..\.. It's believed Gosman intends to keep his mansion under the terms he works out with his creditors. Florida law typically protects real estate holdings in the case of bankruptcy filings..\..
  [Hmm, real estate holdings in general (A) or just your primary domicile in particular (B)? If (A), sounds like a great state to do a lotta loans, a lotta real-estate acquisitions, and a lotta bankruptcies.]
  Gosman's troubled empire includes CareMatrix Corp. of Needham MA, a large operator of retirement communities that filed for Chapter 11 in November. He also started and ran MediTrust Cos., once the nation's biggest real estate investment trust for health care facilities, and Innovative Solutions Ltd., a Providence RI company that handles clinical trials for drugs and was in bankruptcy protection for a period last year.... Gosman resigned as Innovative's chairman last year, but he remains on the board. Innovative sued Gosman over a $10.9m loan it made to a private company Gosman controlled, Chancellor Development Corp.
  [So let's get this straight. Innovative Solutions sued this guy for $11m and still lets him sit on their board?! That's certainly an "innovative" solution. Maybe they should rename themselves "Deathwish Solutions."]
  Gosman filed Chapter 11 rather than repay the loan, his lawyer told the Post, pending other business moves he plans to make....
  ["Sing hey ho, the wind and the rain."
  "And the wind she bloweth night and day...."
  But soft, we sense a surge of slime from the South.]

• U.S. Office Products files for bankruptcy, Reuters via NYT, C4.
  ...and some of its units...for Chapter 11 bankruptcy protection and sold some assets....

• Subsidiary fails, dealing a blow to Korea's Hyundai - A collapse that is expected to ripple across Korea's building industry, by Don Kirk, NYT, C2.
  ...which is still suffering from the effects of the economic crisis of 1997 and 1998..\..
  [When will the spindoctors come clean with us? (Spindocs + clean = oxymoron?) What they really mean to say is, the economic crisis of 1997 and 1998 went on through 1999 and 2000 and basically never really ended, except in the minds of the investment cheerleaders.]
  The Hyundai Group, South Korea's largest conglomerate until its breakup last year, suffered another blow over the weekend when the Korea Exchange Bank said that one of the Group's subsidiaries, the Korea Industrial Development Co., was bankrupt. [It] had failed to meet payments of about $6.3m last week. The company's debt is about $480m....

1. Bankruptcy bill gains, pointer blowout (to A18), NYT, front page.
   The House overwhelmingly approved a bill that would overhaul the nation's bankruptcy system and make it much harder for people to wipe out their debts.
   [So the creditcard folks must have got to a lot of "Democrats" too. This will further weaken the already weak centrifuge on wealth in our slide into the Third World.]

2. [But we can take comfort in the fact that, though we're the No.1 economy, the No.2 economy is ahead of us in the downward slide -]
   Japanese theme parks facing rough times, by Miki Tanikawa, NYT, W1.
   TOKYO...- As Japan's government and private industry grapple with immense debts, fresh storm clouds blew in last week from an unlikely quarter: theme parks.
   A bankruptcy filing by Phoenix Resort, a theme park operator, has now cast a harsh spotlight on problems in what Japan calls its third sector, enterprises partly owned by local governments.... The company...runs Seagaia, a mammoth artificial beach complete with retractable roof and wave-generating machine. [It] is only one of hundreds of third-sector enterprises reeling from financial difficulties stemming from the bubble economy of the 1980's.
   [It wasn't a bubble in Japan until they started discarding lifetime employment and copying our downsizing. That's how they shrank their consumer base, and that's how we're shrinking ours.]
   There are 6,794 corporations in Japan in which a municipal body holds a stake of 25% or greater...and nearly one-fifth of them are concentrated in the leisure and tourism fields. Teikoku Data Bank...estimates that more than [70%] are carrying excessive levels of debt; of the 30 theme parks it studied, 16 were technically insolvent.
   Why is the country littered with overleveraged municipal theme parks? Because building them was a popular answer to a 1980's problem: criticism at home and abroad that the Japanese as a group were doing too much working and saving and not enough relaxing and having fun. Pressure to step up leisure spending, coupled with the success of Tokyo Disneyland, touched off a boom in park building.... Doomed from the start, these theme parks have begun to collapse under the weight of their debts. The troubled ones include Canadian World, Asia Park..., and one...puzzingly named Navel Land....
   Since 1988, 26 third-sector corporations have failed, but none has owed as much as Phoenix Resort.... [Shades of the other huge bankruptcies Japan has had lately. Japan is in a classic crisis of overconcentrated income and wealth. Money is so concentrated, it has suctioned the spending power and markets away from its own massive investments. Only cutting the workweek until the luffing sails are trimmed to a wartime level of labor shortage will centrifuge the income and wealth to levels where spending and demand will rise to meet output and productivity, mega-enhanced as it is by the extreme levels of automation and robotization in the Japanese economy. You simply cannot keep introducing worksaving technology and freezing the workweek without inducing the kind of indefinite depression that Japan is in and that we are going into. The only other solution is exterminating your labor surplus with war or plague, so that market forces raise wages and rebuild demand to match supply. That's been our usual recourse as an "intelligent" species. Maybe it's time we tried something "stupid" and CUT THE WORKWEEK. The "stupid" French are leading the way with a "radical" 35-hour national statutory workweek. Are we really so wedded to workoholic hell that we cannot accept the heaven of free time that our waves of technology are pushing upon us? Do we only know how to talk about freedom, without really being able to handle the most basic type, free time?]