Posts Tagged ‘bankruptcy’

Bankruptcy Watch – Reader’s Digest

Monday, August 17th, 2009

Per Bloomberg

The publisher of Reader’s Digest plans to go through an orderly bankruptcy proceding to get out from under $1.6 billion in debt.    It’s hard to see how Reader’s Digest has much of a future as a paper magazine.   For much of its history, Reader’s Digest did not accept advertisements and was funded entirely by the subscription fees and consumer point of purchase sales.

The bankruptcy should not affect publication of the magazine, at least for now – and doesn’t involve the company’s non-U.S. subsidiaries

Bankruptcy Watch – NV Broadcasting files 11

Tuesday, July 14th, 2009

NV Broadcasting owns 14 TV stations and has filed for bankruptcy.   Several other TV station owners are already in bankruptcy and Sinclair is considering it.   NV is located in Atlanta, and is “turning over the company” to its private equity lenders.

Meanwhile, BloomBama News Service says the economy is rebounding because the price of gasoline went up.

Bankruptcy Watch – J.L. French

Monday, July 13th, 2009

Now that the Geithner GM plan to “take” the “good” GM assets has been brute forced through the bankruptcy courts, the companies owed money by the now worthless “Bad” GM will start all falling over.   J.L. French makes aluminum components for all of the “big 3”.

The account in the Detroit Free Press mentions that American Axle, another automotives parts suppplier in Detroit will also probably have to file bankruptcy.   And the dominoes keep falling…  along with the TOTUS…

It’s kind of hard to make cars without the parts.

Bankruptcy Watch – Sinclair Broadcasting

Monday, July 13th, 2009

According to the Baltimore MD Business Journal, Sinclair Broadcasting has filed an 8-K form (Material Event) stating that they may be forced to file Chapter 11. Sinclair used to be in the radio business, but sold that part of the company about 10 years ago. They operate 38 TV stations, and have been hard hit by the drop in TV advertising for automobiles.  

Not mentioned in the story is Sinclair was also the target of a boycott in 2004 for planning to run a TV show that showed Vietnam Hero Senator John “F” Kerry in an unfavorable light.

Bankruptcy Watch – CIT

Saturday, July 11th, 2009

This is CIT, not CitiGroup.   THIS IS HUGE.

CIT is a commercial lender.  They loan money to businesses.   They had tried to get FDIC coverage on their obligations, but the FDIC has said no way.  FDIC coverage is for retail banks  (which is what Paulson/Geithner/FDIC should have said to American Express and GE Capital).   They had also been involved with mortgage investments, which they have already exited.

According to Reuters, CIT has retained a bankruptcy firm and is writing up the paperwork to file bankruptcy.   Commercial lending (funding of shopping centers, office buildings, factories, leases of airplanes and rail cars, factoring of receivables) tends to take a bit longer to go into default than consumer lending.

This might be the first indirect fallout of the GM and Chrysler bankruptcies.  By setting the precedent that Tim Geithner can brute force companies through bankruptcy, forcing the government and non-secured creditors to the head of the line and leaving the bondholders with all the worthless junk, that is going to kill the ability of companies to raise money by selling secured bonds by companies that have any hint of financial problems.    There is no free lunch.   The “quick fix” has unintended consequences.

CIT will announce its earnings on July 23rd.  That seems the logical date to also announce their restructuring.  The company lost about $1 a share in the first quarter of 2009.   A year ago their stock sold for about $60 a share, it is now approaching $1 a share, which is the kiss of death for a publicly traded stock.

In addition to what a bankruptcy will do to people holding stock and bonds, clients who rely on them for working capital (like selling receivables to get the cash sooner) will have to find another commercial bank.   If the clients themselves are on shaky ground, they will have trouble finding access to loans on their existing terms, and they could ultimately cascade into this dark deep hole being dug by Tim Geithner.

Tim Geithner and Mr Paulson created a “temporary” commercial lending facility run by the U.S. Treasury and funded by the Federal Reserve that is “cherry picking” the least risky and most profitable commercial lending clients, which will ultimately bury all of the commercial banks if it doesn’t go away (There is no such thing as a temporary government program).  

If you’re in business, you can’t compete against the government and survive, because the government owns all the weapons.   That’s why the notion that the US government and Health Insurance companies competing will never work.  Either it is extremely naive or it is deliberate strategy for complete government control after capitalism “fails”.

Bankruptcy Watch – Bender Shipbuilding

Wednesday, July 1st, 2009

Bender Shipbuilding, a 91 year old ship building and repair company in Mobile, Alabama has been forced into involuntary bankruptcy.  There aren’t all that many U.S. based shipbuilding companies.   The Obama machine rolls on

Bankruptcy Watch – Fairpoint

Friday, June 26th, 2009

Fairpoint, the telephone company that took over much of the phone system in New England from Verizon, is in financial trouble, according to the Nashua NH Newspaper.

Fairpoint is asking for their bondholders to delay repayment, and indicating that one of the possible alternatives could be bankruptcy.

Bankruptcy Watch – Eastwind Maritime

Wednesday, June 24th, 2009

Reuters

Eastwind Maritime is a significant shipping company based in New York.  They own a fleet of a variety of cargo ships.  They have filed for Chapter 7, which is immediate liquidation, not reorganization.  

Meanwhile, Bloombama News Service says things are looking up since things are not falling as fast as they could be.

Bankruptcy Watch – Tahiti Village

Wednesday, June 24th, 2009

Another major advertiser on radio is preparing to file bankruptcy – the company that owned Tahiti Village, that “resort community” in Vegas giving away “free vacations” that was really selling people Time Shares…   In fact, some of my earliest “polls” were about this company’s misleading ads.  I wonder how Roseanne Barr feels today about her role. 

http://www.lvrj.com/business/48997596.html

Bankruptcy Watch – Red Roof Inns

Wednesday, June 24th, 2009

Bloomberg Story

Red Roof Inns has defaulted on $367 million in mortgage debt.   They aren’t yet filing for bankruptcy, but that’s pretty likely.   CitiGroup led the buyout of the company in 2007.