While the economy has continued to hurt our wallets and personal debt loads, even businesses are having a hard time combating the effects of a downtrodden economy. Although personal bankruptcy filings have decreased over the past year, it appears that there has been an increase in business filings. Are more companies filing for bankruptcy or are we just more attentive to hearing about them in recent years? It could be a bit of both, but the fact is that some well-known names have hit the newsstands with their bankruptcy filing ads.
american airlines
Perhaps the most notable commercial bankruptcy of 2011-2012 seems all eyes are on American Airlines and its Chapter 11 outcome. As the nation’s largest airline, news of the airline’s bankruptcy has struck fear into the hearts of Many. American has the largest number of employees and has a significant market share in the United States airline industry. With thousands of jobs at risk, consumer profits in the air, and the fate of the entire fleet at stake, American has caught the attention of all of us.
American Airlines has managed to dodge some major financial bullets so far as they are working to restructure their debts. Having made only minor layoffs and cutting some service flight routes, there hasn’t been much of a fuss in local economies as a result. Yet when news broke last week of the airline’s plans to hire multi-million dollar financial advisers, many worried the airline would make further employee or customer cuts to offset its costs.
hostess brands inc.
One of the most notable cupcake brands in the United States is also seeking Chapter 11 protection, again. Presenting for the second time in three short years, Hostess Brands Inc. has found itself in financial trouble once again. The maker of popular Twinkie snacks emerged from a previous Chapter 11 case in 2009, but has failed to return to profitability since.
The snack maker now owes about $945 million, $11.8 million of which is owed to two major pension fund creditors. With close to $1 billion in debt liabilities, Hostess hopes the second time around will be a charm to properly resolve debts and regain control over its profitability.
Saab car manufacturers
Swedish automaker Saab announced its plans to file for Chapter 11 just before the end of the year. Now owned and operated by General Motors, there is much debate about the fate of the car brand. For now, offers are being accepted around strong interest in a takeover from foreign competitors. However, General Motors is unlikely to allow the brand to be sold in a buyout when Saab cars now possess some of GM’s trademark features.
