Which Companies Have survived bankruptcy?
Corporate Financial Management
Which Companies Have Survived Bankruptcy?
According to Gerald S., bankruptcy is a generalized term for a Federal Court procedure that helps consumers and businesses get rid of their debts and repay their creditors (2014). If anyone can prove that they are entitled to it, the bankruptcy court will protect them during the bankruptcy proceeding. In general, bankruptcies can be categorized into two types: liquidation and reorganization.
The U.S. Court of Bankruptcy (2015), states that among the popular proceedings are chapters 7, 11, 12, and 13, which individuals and businesses ...view middle of the document...
It was put in place due to the fact that struggling farmers had many debts but too high of an income to qualify for chapter 13 bankruptcy and not enough time to file for chapter 11 bankruptcy (U.S. Court for Bankruptcy, 2015).
Many large businesses, corporations, partnerships and limited liability companies use chapter 11 to reorganize their debts and continue operating. Chapter 11 cases are by far the most complicated ones of any bankruptcy cases, and as a result, there are very few firms that handle chapter 11 cases, but many times individuals and companies cannot obtain the relief they need under Chapter 7 or chapter 13; thus a chapter 11 is their best option (Gerald, 2014).
Teloni states that over the years the process of declaring bankruptcy was incredibly simple (2014). The rate for individuals and companies were high where the American bankruptcy law allows people to avoid paying their debts by offering the debtors a discharge without a hash consequence.
Teloni continues to state that, by not having repercussion for their action, bankruptcy filers often plan future bankruptcies, allowing them to steal even more money from creditors with no punishment until April 20, 2005, when President George W. Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protect Act, where the legislative act made several significant changes to the United States bankruptcy code. This Act made it more difficult for some consumers to file bankruptcy under chapter 7. They, instead, were forced to file chapter 13 where the fees are more expensive to file, and a repayment plan was enforced up to five years.
The word “bankruptcy” can bring guilt, shame, embarrassment, frustration and pain onto a business. Many companies survived bankruptcies by changing the ways they did business and paying more attention to how they operated their businesses. In 1987, Texaco filed bankruptcy, the largest file in United States history with assets of $34.9 billion.
Texaco was forced into bankruptcy as a result of the 1985 decision by a Houston jury, because Texaco had illegally interfered with Pennzoil's plan to acquire Los –Angeles based Getty Oil Co. The jury awarded Pennzoil damages of $10.5 billion plus interest, which was the largest award in U.S. history. Nearly one year after filing, the company became part of Chevron, and today, it continues to operate throughout the United States and in over 150 countries, and upon completion of its merger with Chevron Corporation, they stand as the world's largest publicity traded energy firm (Arndt, 1988).
Arndt's article continues to emphasize that Texaco explores, discovers, and produces oil and natural gas, manufactures and markets fuels and lubricant products, operates trading, transportation, and distribution facilities, and manufactures alternate forms of energy for power in the chemical market. Texaco/Chevron's stock on the New York Stock Exchange today is worth $99.88 a share (Arndt, 1988).
Many airlines have...