Authored by Geoff Vaughan in Business
Published on 04-27-2009
Companies will go bankrupt for various reasons, but it always boils down in the end to the business not being able to meet its expenses due to a lack of revenue. And during times of recession it’s even tougher for struggling companies to remain financially viable, as a lack of consumer confidence will usually lead to lower sales. The following are some companies that have had to do the dreaded act of declaring bankruptcy.
Monaco Coach Corporation
In March 2009, this company announced it would reorganize under Chapter 11 Bankruptcy. With one of the weakest economies in recent history, one can only imagine the pressure makers of Recreational Vehicles are under. Consumers have been tightening their belts thanks to layoffs and economic jitters, so naturally sales of RVs, the quintessential luxury item, have plummeted. Unfortunately, Monaco Coach doesn’t expect to really come out of Chapter 11 in its current state. The bankruptcy announcement coincided with news that the company was letting most of its remaining employees go, and it has announced that it would remain in business as a debtor-in-possession in anticipation of the sale of part or all of its business.
Sports Museum of America
This museum, located in New York, recently made news with a Chapter 7 filing. But while the company’s financial troubles were noteworthy, it was the company’s assets that were responsible for putting the story on the front pages. Among other curiosities, the now-defunct museum’s exhibits included the sports bra that Brandi Chastain famously exposed after her winning penalty goal in the 1999 World Cup. Although the bra was a loaner from Chastain herself, it remains in storage for now because of the bankruptcy case. She must claim it back and pay $250 plus shipping if she hopes to ever see it again.
Sun-Times Media Group
One high profile company to recently declare bankruptcy is the Sun-Times Media Group, publisher of the Chicago Sun-Times newspaper. It’s no secret that this economy has been very hard on newspapers as advertising budgets are often cut during down times. But the added pressure of the internet is making it almost impossible for the newspaper industry to continue to operate in its present form. This behemoth declared bankruptcy in March ’09, and plans to continue operating its papers and websites during the proceedings, hoping to complete the process later in the year.
Unlike the Sun-Times Media Group and the Monaco Coach Corporation, this California tour company does not plan on staying open for business during its own bankruptcy filing, and has in fact shut its doors for good. Although it had been in business for 40 years, the current economic downturn has been too much to bear this time around. In times of decreased discretionary spending, vacations are one of the first things to go, so travel agencies and tour operators are extremely sensitive to recessions. Happy Vacations specialized in trips to Hawaii, and it served other destinations as well including the Caribbean and Latin America.