Here are some high profile companies who filed bankruptcy and some things we can learn from their misfortunes:
Marvel
Marvel Comics began in 1961. For 40 years they have been selling their magazines in convenience stores all across the country. With the decline in magazine sales Marvel struggled. In 1996 their stock dropped 80 percent in one year and Marvel filed for bankruptcy. Shortly after the filing, Marvel began seriously thinking about putting some films on the big screen. This was a huge hit and they are again a dominating force in the market. They were able to adapt and capitalize on the changing demands in the entertainment industry.
Hostess
While the original company is no longer around, Hostess Twinkies still are. The company was forced to close its doors due to rising costs and a union strike. The union’s demands did not allow the company to turn a profit, so they closed their doors. Later, the Hostess brand was bought and reopened, this time with no union labor, and was able to make, “The sweetest comeback in the history of ever.”
Delta Airlines
Higher jet fuel prices, increased competition from low-fare carriers, overpaid pilots, and other management decisions forced Delta into bankruptcy in 2005. The successful reorganization is mainly attributed to the willingness of management and employees to work together to change and make sacrifices. Here are a few of the things that saved Delta: pilots took a 25% pay cut, Delta acquired and merged fully with Northwestern Airlines, and inefficient routes were eliminated.
Six Flags Entertainment
These popular amusement parks entered bankruptcy protection in 2009. Trouble began years earlier when the cash flow was too tight to support the business and they began selling off properties. Damage to a park during Hurricane Katrina and the recession in 2007-2008 was the final blow. Once Six Flags reorganized and made a deal with investors, they were able to reopen and begin gaining profits.
Texaco, Inc.
In the 1980’s Texaco was in a brutal legal fight with Pennzoil and ended up owing the company $10.5 billion. Texaco filed for bankruptcy and reorganized. Texaco was then bought out by Chevron making it one of the largest oil companies in the world. Texaco’s willingness to make changes and reorganize form the top down helped the company recover enough to successfully merge with Chevron.
The Pittsburgh Penguins
The Penguins finished the regular season with the best record in the Eastern Conference, though the team was eventually knocked out of the 2013 Stanley Cup Playoffs. Sadly, the team was once saddled with debt and had to file for bankruptcy in 1998, its second time doing so. The Penguins owed more than $90 million and the team was eventually bought by former player Mario Lemieux. He is still part owner today, and the team seems to have rebuilt itself into a competitive and profitable franchise.