Bankruptcies in US companies have continued...
Enron and Worldcom were two other dubious names at the dawn of this century that investors would remember with horror and trepidation. Accounting frauds at these companies, which were done by executives at multiple levels to hide the burden of debt on them, led to further investor billions going down the drain; and the government bringing out its much publicized Sarbanes-Oxley legislation to prevent further frauds.
With GM now staring at the road to bankruptcy, that too, after borrowing extremely precious time and money from the US government, the issue of corporate bankruptcy is as relevant as it ever was. The examples are many, and span across sectors and throughout history, with companies like Pacific Gas and Electric Co., Texaco, Inc., Financial Corp. of America, Refco Inc., Delta Airlines & IndyMac Bancorp, Inc. on the list. Bloopers like flawed strategies, dubious reputations of top executives, failing to move with the times, et al have been the usual culprits.
Chapter 11 is not such a bad place, provided you don’t intend to stay there! Professor Michael A. Roberto, Professor of Management, Bryant University, Rhode Island, comments to B&E, “Chapter 11 bankruptcies in the US enable firms to restructure their obligations to creditors. In doing so, the company has the potential to emerge from a bankruptcy with a more optimal capital structure, a more reasonable debt load & less burdensome labor contracts.” Delta Airlines is a perfect example. The airline was burdened by high costs and weak revenues, so it took bankruptcy protection. After a restructuring that lasted around 18 months, the airline brought itself out of the Chapter 11 successfully. So it’s not that bad, Wagoner, oops sorry, you’ve been kicked out! Not that bad, Mr. Fritz Henderson!
Enron and Worldcom were two other dubious names at the dawn of this century that investors would remember with horror and trepidation. Accounting frauds at these companies, which were done by executives at multiple levels to hide the burden of debt on them, led to further investor billions going down the drain; and the government bringing out its much publicized Sarbanes-Oxley legislation to prevent further frauds.
With GM now staring at the road to bankruptcy, that too, after borrowing extremely precious time and money from the US government, the issue of corporate bankruptcy is as relevant as it ever was. The examples are many, and span across sectors and throughout history, with companies like Pacific Gas and Electric Co., Texaco, Inc., Financial Corp. of America, Refco Inc., Delta Airlines & IndyMac Bancorp, Inc. on the list. Bloopers like flawed strategies, dubious reputations of top executives, failing to move with the times, et al have been the usual culprits.
Chapter 11 is not such a bad place, provided you don’t intend to stay there! Professor Michael A. Roberto, Professor of Management, Bryant University, Rhode Island, comments to B&E, “Chapter 11 bankruptcies in the US enable firms to restructure their obligations to creditors. In doing so, the company has the potential to emerge from a bankruptcy with a more optimal capital structure, a more reasonable debt load & less burdensome labor contracts.” Delta Airlines is a perfect example. The airline was burdened by high costs and weak revenues, so it took bankruptcy protection. After a restructuring that lasted around 18 months, the airline brought itself out of the Chapter 11 successfully. So it’s not that bad, Wagoner, oops sorry, you’ve been kicked out! Not that bad, Mr. Fritz Henderson!
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Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM - FLP (Flexi Learning Program)
