Bankruptcy, a process through which a company either liquidates its assets or seeks "relief" from its creditors in order to stay in business, is a fearful prospect for anyone involved in credit risk management. Losses to bankruptcy, however, can be minimized and in some cases avoided all-together by monitoring the symptoms and scenerios that lead to bankruptcy. What are these symptoms and scenerios? In this section, CreditPulse will provide pertinent financial data, uncover the reasons for the bankruptcy and provide a timeline of events for each bankruptcy profiled thus providing a roadmap for risk practitioners in analyzing and anticipating bankruptcies. Semiconductor Memory Chip Maker Yields to Bankruptcy
June 11, 2009
Spansion Inc. bankruptcy illustrates the risk posed by companies dependent on high market caps in boom times for survival. The company was below the industry averages on all five CSI benchmarks.
On March 1, 2009, Spansion, Inc., a $2.3 billion flash memory chip manufacturer based in Sunnyvale, California, and four of its affiliates filed for chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware only three years after going public on the NASDAQ.
Chrysler LLC, the third largest U.S.-based auto maker, filed for Chapter 11 bankruptcy on April 30th in an unorthodox government-led bankruptcy in which the U.S. Treasury will contribute some $3.3 billion and the company's labor union will become majority owner.
The committee of unsecured creditors of Archway Cookies LLC, an entity that filed Chapter 11 bankruptcy on October 6, 2008, filed suit last Friday against the private-equity firm Catterton Partners and a host of others for what it called "widespread accounting fraud that permeated throughout the debtor's management," according to the complaint.
Less than one week after the nations largest poultry producer went bankrupt, Tribune Company, one of the nations largest and best-known publishing firms goes bankrupt. The company owns and operates the Chicago Tribune, Los Angeles Times and a host of other market-leading newspapers and television stations.
The nations's largest poultry producer succumbs to debt and tight credit markets. Pilgrim's Pride Corp files for Chapter 11 bankruptcy less than two years after hostile $1.1 billion takeover of Gold Kist.
