When a company's name becomes practicallysynonymous with the industry it's in, it seems impossible that the businesscould ever fail. It'd be like Coca-Cola going under even though a large chunkof the population refer to all sodas as "Coke." But even the mostrecognizable businesses sometimes can't adjust to changes in the market orovercome financial troubles. These companies were once the top in their field,but fell to the point where filing bankruptcy was their best option.
We're barely into 2012 and a major company has already filed forbankruptcy. Eastman Kodak, the groundbreaking photography company that's beenaround since the late 1800s, saw its stock drop 35% after they filed forChapter 11 bankruptcy in January. The age of digital photography seems to havecaused some innovation problems for the business that made a name for itself byselling cheap cameras and making most of their profit through film and suppliesto print photos. Once those money-making elements started to become obsolete,Eastman Kodak found itself with $6.75 billion in debt. Not exactly a Kodakmoment for the company.
Even if you were too young to understand it all when the trouble wentdown, you've probably at least heard of Enron, which became synonymous withcorporate greed and corruption. In 2000, the company was considered a leadingbusiness in electricity and natural gas, along with several other services. Bythe end of 2001, Enron had filed for bankruptcy after it came out that they'dbeen cooking the books regularly. The scandal affected corporations all overthe U.S. by calling into question corporate accounting practices in general,which led to a federal investor protection act, and affected employees andinvestors with the company who lost jobs or huge amounts of money (or both).
We still remember Blockbuster, right? We used to go there beforehosting a slumber party or having a date night at home to pick up the newestreleases to snuggle up to. There's no doubt that it stole the show from itsred-headed stepbrother, Hollywood Video, and any mom-and-pop rental stores intown. Once RedBox and Netflix came around, though, it was harder forBlockbuster to hold onto their dominance in the home entertainment industry,and in 2010, the company was forced to file for bankruptcy. Dish Network wonthe enterprise at auction in 2011.
Schwinn has been the quintessential bike for kids and adults alikesince the company gained overwhelming popularity in the '60s. So you'd probablybe surprised to hear that the company of the perfect cruising bike has declaredbankruptcy twice. By 1990, many other bicycle brands were gaining traction inthe market and Schwinn began exporting production to save money. By 1993, theyhad declared bankruptcy. The company was bought by an investment group. In2001, it filed for bankruptcy again, and was purchased by Pacific Cycle atauction.
General Motors was consistently considered the leading automaker in theworld for 77 years, up until 2007. With mounting debt and a poor economy, thegovernment pushed them toward Chapter 11 bankruptcy in 2009. This company,though, seems to have a success story compared to some other bankruptcy tales,though it's still too soon to see the long-term effects. GM came out of Chapter11 reorganization (with help from government funds) with an initial publicoffering that was the highest in history, at $20.1 billion. Some contestants on Wheelof Fortune probably wish they could bounce back from a"Bankrupt" like that.
We don't want to get into a debate over the superiority of Marvel overDC (or vice versa), but there's no denying that Marvel has been one of the topcomic book companies for the past couple of decades. The parent company ofMarvel Comics, and thus some of your favorite character like Spider-Man, theX-Men, and Captain America, has needed its own hero in its business history.Facing money problems and unable to come to a bailout deal with bondholders,Marvel filed for bankruptcy in 1996. The resulting drama with shareholderscould've filled a (very boring) comic book, which would've ended with themerger of Marvel Entertainment and ToyBiz to create Marvel Enterprises.
Men's fashion leader Hugo Boss' story is kind of backwards compared tothe rest of these. While the master tailor was creating great clothes beforehis bankruptcy, his company is now a giant in the good-looking men industry.Hugo Boss himself started the company in 1924 in a small town in Germany, butbecause the economy was so tough after World War I, he had to declarebankruptcy after just six years. But in 1931, he picked back up and beganbuilding an empire. Today, the company does business in 110 countries with severalfashion lines for both men and women.
Remember that dark time in recent history when people were going aroundeating nothing but big slabs of meat? Sure, eating few-to-zero carbs helped fatpeople lose weight, but it also made them look like crazed savages. The companythat was encouraging this behavior was Atkins Nutritionals, the biggest name inthe no-carb diet fad. Besides the books on the diet, the company also soldlow-carb food products to go along with them. Of course, just like with mostfad diets, the interest in the Atkins way of eating died down, and in 2005, thecompany filed for bankruptcy.
As the fourth biggest investment bank in the country, you could sayLehman Brothers was pretty important. It was also using some accounting tricksto make it seem more stable than it was, and was eventually brought down by themortgage crisis. With $613 billion in bank debt and $155 billion in bond debt,Lehman Brothers' filing for bankruptcy in 2008 became the largest bankruptcy inU.S. history.
At some point in your life, you've come across a Reader's Digest magazine,whether it was at a doctor's office or in the pile of reading materials in yourgrandpa's bathroom. Considering it was first distributed in 1922, it's nosurprise that the average reader is, well, really old. And with the troubleprint publications have been running into in the last decade, this old-fashionedpublication just couldn't pull its weight anymore. Reader's Digest Associationhas other magazines, but they couldn't escape bankruptcy in 2009.
Contacts and sources:
Roxanne McAnn
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