Battling for a desert hockey team
Maybe this is the comeuppance for planting a hockey team in the desert. In May, the Phoenix Coyotes filed for Chapter 11 bankruptcy protection with up to $500 million in debts and less than $100 million in assets.
After that, a hockey-worthy fight broke out between the two potential new owners: Jim Balsillie, co-CEO of BlackBerry-maker Research in Motion, and Jerry Reinsdorf, owner of the Chicago White Sox and Chicago Bulls. While Reinsdorf said he would keep the club in its adopted home, Balsillie wanted to move it back to Canada. (The Coyotes started as the Winnipeg Jets before moving to Glendale, Ariz., a suburb of Phoenix, in 1996.)
In mid-June, however, the bankruptcy judge ruled against Balsillie's $213 million bid and said the team would be auctioned off in August to anyone willing to keep the club in Arizona. But the bickering between the two sides continues.
Whoever wins, they're scoring a team that averaged fewer than 11,000 fans at each game during the 2008-2009 seasons. That left the stadium almost half empty at home games.
The president's suit maker needs a bailout
Not even having ultra-dapper President Obama as a customer could help Hartmarx. The Chicago-based clothing maker declared bankruptcy in January, just after the president wore its suits for his inauguration and election night attire.
The company listed between $100 million and $500 million in assets and liabilities, and noted in its filing a "substantial decline in discretionary apparel purchases by consumers and by the company's retail customers."
Established in 1872, Hartmarx makes business, casual and golf clothes for its own brands -- including Hart Schaffner Marx, Palm Beach and Racquet Club -- and has exclusive rights to market under other luxury brands -- including Tommy Hilfiger, Burberry men's tailored clothing, Ted Baker, Pierre Cardin and Perry Ellis.
Currently, the brands look to survive under the guidance of British equity firm Emerisque, which bid $128.4 million for Hartmarx.
Six Flags waves the white flag
The economy has been quite the thrill ride for Six Flags. The New York City-based amusement-park operator went belly-up in June, unable to spin off $2.4 billion in debt -- even on the Tilt-A-Whirl.
But never fear: The chain's 20 parks, which stretch from Montreal to Mexico City, will remain open. The Chapter 11 filing is "strictly a financial restructuring" of the company's debt, said President and CEO Mark Shapiro in a statement.
The parks attracted 25 million visitors in 2008, and the company made $275 million. "Six Flags has been a favorite family destination for almost a half century. Our financial reorganization will best position our parks to entertain millions of guests for another 50 years," Shapiro added.
Fancy soap-maker can't hold water
When you're afraid you might lose your job, triple-milled soap, $18 body lotion and aromatherapy spa treatments tend to become less of a priority. The domestic portion of Crabtree & Evelyn filed for Chapter 11 bankruptcy protection in July with between $10 million and $50 million in assets -- and just as much in debts.
The Woodstock, Conn., company was founded in 1973 and built its brand on natural products that feature herbs, fruits and fresh flowers. But as consumers watched Wall Street spiral lower, they reigned in spending on consumer luxuries. Crabtree & Evelyn's 126 stores, mostly sprinkled in malls throughout the country, have seen a sharp sales pullback.
The real-estate portfolio of the company will go under the microscope as part of its bankruptcy filing, but for now, the stores remain open. Crabtree & Evelyn also operates a Web site, which is unaffected by the filing, and distributes products to thousands of wholesalers.
Crabtree & Evelyn is owned by Kuala Lumpur Kepong Berhad, a Malaysian company that is publicly traded there and invests in a grab-bag of industries, including manufacturing, real estate and retail.
Filene's Basement dresses down
This bargain basement may have passed on a few too many deals to its customers. Filene's Basement filed for Chapter 11 bankruptcy protection in May with assets of up to $100 million and liabilities of as much as five times that amount.
The company said the credit crunch coupled with consumers pulling back made its debt burden unmanageable.
Fellow discount retailer Syms agreed to pay $65 million for the company, which was actually founded in a Boston basement in 1909. Syms bought 23 of the retailer's 25 store leases as well as its inventory -- which includes everything from Seven jeans to Prada merchandise. The stores will continue to operate under the Filene's Basement name.
Extended Stay need a refresh
During a recession, travelers seem to be more willing to bunk up with buddies to save a buck. The long-term hotel operator, Extended Stay, filed for Chapter 11 in June, buckling under a debt load totaling $7.6 billion at the end of 2008, according to court documents.
The hotel chain, meanwhile, showed assets of only $7.1 billion at the end of 2008 with sales of $1 billion for the year. And revenues tumbled further as the recession dug in deeper: The first five months of 2009 saw revenue per available room crater by 23.2% compared to the same period the year prior.
The hotel chain is popular among business travelers who have to work away from home for more than a night, offering apartment-like conditions with fully equipped kitchen, expanded work space, wireless Internet, onsite guest laundry facilities, and pet-friendly rooms.
During the bankruptcy process, the hotel chain -- which has more than 680 properties under a handful of regional names such as Extended Stay America, Homestead Studio Suites, Studio PLUS and Crossland -- will all remain open and in operation.
Eddie Bauer packs up - again
The Washington-based clothing retailer, which is known for its mom jeans and rugged outdoor gear, filed for Chapter 11 bankruptcy protection in June.
This is the company's second spin through the courts. Its previous owner, Speigel Catalog, which bought the company in 1988, had filed for Chapter 11 in 2003. When Spiegel emerged in 2005, Eddie Bauer was spun off and became a stand-alone company for the first time since it was first acquired, by General Mills, in 1971.
"Unfortunately, a crushing debt burden left from the Spiegel bankruptcy combined with the severe, prolonged recession have left us with no choice but to look for ways to restructure the company's balance sheet," said President and CEO Neil Fiske in a statement.
When Eddie Bauer filed for bankruptcy, it claimed between $100 million and $500 million in assets, but just as much in liabilities. Eddie Bauer intends to sell the majority of its assets to CCMP Capital for $202 million, though bidding is still open.
CCMP has agreed to keep the majority of the company's 371 stores open, as well as its catalogue and Web site operations. Gift cards, however, will only be honored until Sept. 1 or the company sells its assets -- whichever comes first.
Crunch Gym feels the burn
New York City-based Crunch gym began as a basement aerobics studio in the East Village in 1989 -- one without locker rooms or air conditioning. Over the past 20 years, it has grown in popularity -- largely on a reputation for creative classes, such Hip-Hop Aerobics and Co-Ed Action Wrestling -- to 28 locations around the country.
But in May the company filed for bankruptcy, citing unmanageable lease contracts. In bankruptcy records, the gym's parent company, AGT Crunch Acquisitions, said it had at least $500 million in assets and liabilities. The company has since entered into a purchase agreement with New Evolution Fitness Co., whose founder also started 24-Hour Fitness.
The company has closed two gyms -- one in New York and another in San Francisco. A third gym was shut down, but replaced with another new gym around the corner.
Crunch plans to exit bankruptcy by the end of the summer.
Pilgrim's Pride has hurt pride
Surging corn and grain prices coupled with softening demand pushed Pilgrim's Pride to file for Chapter 11 bankruptcy in December to address "short-term liquidity challenges."
The company filed for bankruptcy with $3.75 billion in assets and $2.72 billion in debts. The company said it had sales of $8.5 billion in 2008, but also faced an oversupplied and underpriced chicken market.
Pilgrim's itself slaughters and sends to market 45 million birds each week for a total of 9 billion pounds of poultry each year. It also produces 42 million dozen table eggs per year.
The Pittsburg, Tex.-based company will continue operating its 39 chicken and prepared-food plants throughout the bankruptcy process, and further layoffs are not expected for its 41,000 employees. (Eight plants had been previously idled.)
Pilgrim's Pride is hoping to emerge from bankruptcy by the end of the year.
Bloom is off celeb florist
As Wall Street spiraled, so did corporate budgets for flower arrangements. Saundra Parks makes lush floral arrangements at her Manhattan floral boutique, The Daily Blossom. But she filed for Chapter 11 bankruptcy protection in April, citing estimated assets under $50,000 and estimated liabilities between $100,000 to $500,000.
The luxe florist designs arrangements for corporations and celebrities -- Eddie Murphy and Maya Angelou are rumored to have been clients -- and Parks says that she has seen clients come back along with the green shoots of the economic recovery.
No relief for Debt Relief USA
Debt Relief USA, also called No Debt USA, couldn't seem to help itself. The debt-consolidation company filed for Chapter 11 bankruptcy protection in June with $5 million in total liabilities and only $4.65 million in assets. Not only has the company filed for Chapter 11, it has completely shut down, leaving customers out of luck.
"One of the unfortunate consequences is that you are left without the service you have paid for," its Web site now reads, directing current clients to reach out to their own attorneys.
The company site also reported that it faces investigations from the Federal Trade Commission and by the Attorneys General of several states.
Recession hits newspapers
The recession has cut into advertiser budgets, pulling vital dollars from an industry already being squeezed. The owner of the LA Times and the Chicago Tribune -- the Tribune Co. -- filed for Chapter 11 bankruptcy protection at the end of 2008.
The bankruptcy filling was intended to lighten the company's debt load, which Tribune said it has been carrying since it went private at the end of 2007. Tribune has offered no timeline for its exit from bankruptcy, but it is operating normally during the process.
Among scores of other struggling media companies, the Sun-Times Media Group, which operates 59 newspapers throughout the country, filed for Chapter 11 protection at the end of March. The media group cites a drastic fall off in print revenue sales, a weak economy, and a tax burden wracked up by previous management as factors in the downfall.
The Sun-Times Media Group has been slashing costs, but operations continue as the company looks for a buyer.
Vallejo, Calif.: Like state, like city
The town on San Pablo Bay just north of San Francisco filed bankruptcy as plunging property taxes crippled the town's coffers and left the city unable to make-good on union labor contracts.
A bit more than a year ago, the town of Vallejo, Calif., filed for Chapter 9 bankruptcy, and the city is still working to negotiate with labor unions, in particular the fire and police departments. Vallejo had to file for Chapter 9 bankruptcy -- not Chapter 11, as corporations do -- because it does not have the option to restructure its debt, as corporations do with a Chapter 11 filing.
A revolving door of city leaders hasn't helped the town manage the negotiations, and there is no timeline for when Vallejo expects to exit bankruptcy.
Home to just shy of 120,000 people, Vallejo was established in 1844 as a shipping center, but the Mare Island Naval Shipyard was shut down in 1996. The town is also home to one of Six Flags more successful theme parks, Discovery Kingdom.
Lear hits the brakes
There is no demand for car seats when there is no demand for cars. And car sales are at rock bottom right now. So Lear Corp., which manufactures car seats and electronics, filed for Chapter 11 bankruptcy in July with $1.3 billion with of assets and a whopping $4.5 billion in debt.
The Southfield, Mich.-based company employs 80,000 people at 210 facilities in 36 countries. However, only the North American branches of the corporation went belly up. Recently, Lear has raked in 2/3 of its revenue from outside North America.
The auto-parts supplier was founded in 1917 in Detroit, Mich., as American Metal Products and went public in 1994. The company posted net sales of $13.6 billion in 2008, but according to its most recent SEC filings, Lear is projecting sales to sink to $9.1 billion in 2009.
Lear is just one of 21 auto suppliers that have filed for bankruptcy in 2009, according to Original Equipment Suppliers Association. And two of the Big Three -- General Motors and Chrysler -- are going through bankruptcy proceedings of their own.
Lear has already obtained $500 million in financing for the bankruptcy proceedings and so is hoping to complete its reorganization in 60 days. During the bankruptcy proceedings, Lear expects to see business continue as usual.