Bankruptcy is a legal process which involves a person and other entities or business, to be not able to pay their outstanding debts. This is imposed by some legal court order and then the company is sealed. Some have to sold their properties in order to come out of such debts, where any items one has, is not secured, then those would be erased such as credit cards, medical debts, etc., which is why it is called property liquidation. But if one has earned certain amount of money with secured debt, then they might get the choice to reposes their property, for example if it is under proper contract.
Many companies have faced this, where some have overcome this phase, and some have just lost their path. It is a very difficult phase for them to go through, being in a lump sum debt is not easy. But it is also their own doing which led them to here, thinking that further ahead when there is success they could be able to repay it all. However, when that doesn’t happen they are led to bankruptcy. Many have lost their glory, their houses, and prestige by being bankrupted. Below is the list of top 10 famous companies that went bankrupt.
10 Pacific Gas and Electric Co. Bankruptcy
The date on which this company went bankrupt was 4th June 2001, in San Francisco. The assets they lost were around $36.1 billion. This company was founded in the year 1905 which used to supply gas and electricity to most of the parts of the Northern California. Initially, this company had been doing great, with having several hydroelectric as well as steam plants and natural gas. When there was deregulation in the electricity market, this company had sold their natural gas plants where they had to purchase power through other types of energy generators, as with the selling of their natural gas plant, led to lowering their generating capacity.
This led to bankruptcy eventually, as they bought it at fluctuating prices with which they sold at fixed rates, which gave them a lot of loss. But this company survived it, and again emerged in the year 2004, and was said to be one of the most profitable industry in the year 2005, on the well known list of Fortune 500.
9 Pan Am Bankruptcy
Pan American International Airline had been in the business since 1927 to 1991. It was one of the leading airlines of that time. The blue logo in the circular shape by this airline has made a huge impression, that at many airports, this is used to put it on some of the designer bags to travel, which signifies that luxurious traveling today.
In the pop culture this company would still be remembered. It was under a lot of financial debts and was bankrupted.
8 Texaco Bankruptcy
This bankruptcy was dated on 4thDecember 1987, with the assets of $34.9 billion. It was an independent business corporation till the time it merged with Chevron Corporation in the year 2001. It initially started as the Texas Fuel Company and was founded in the year 1901 in Texas, Beaumont, by Thomas J. Donoghue, Joseph S. Cullinan, Arnold Schlaet, and Walter Benona Sharp. It was the one and only company which was selling gasoline in 50 different states, for several years, which is no longer to be true.
In the year 1987, February, the Texas Court, came up with a decision, and here the company to protect their assets filed for having protection, while it was continuing for its appeals. During the process they had to face loss of $4.4 billion, and Texas Supreme Court also refused to hear their appeal. Also another problem erupted as Carl Icahn who is a New York Financier began to buy the stock of Texas rapidly, with the attempt to force them to settle with the Pennzoil. After some weeks Texaco rather than appealing to the Court, agreed to pay $3 billion to Pennzoil.
7 Conseco Bankruptcy
This was on 17th December 2002, with the assets of $61 billion, which is quite a lot. This is not one of those insurance companies. It is rather engaged in consumer finance and insurance through a numerous subsidiary companies. Apart from their subsidiary companies for insurance, it is also a separate legal company which is also distinct. When it went for bankruptcy, it filed a protection code under the United States Bankruptcy in Chicago Court.
It went under a lump sum debt which included the purchase of Green Tea for $6 billion, which is one of the largest lender for home-mobile buyers. With a tentative agreement Conseco was sold to CFN. But it became insolvent when it didn’t pay $4.7 million which was suppose to be paid till December 4.
6 Merry-Go-Round Bankruptcy
This is an enterprise which used to sell clothes and was a retailer for America’s Teenagers for almost 2 decades. But it went under debts and was to shut all of the 536 stores of it. Teens used to spend a lot to shop here, but they rather preferred to buy some rip jeans at well known Wal-Mart then purchasing $300 items from Merry-Go-Round, as that was more fashionable.
They had filed for protection in the year 1994 but couldn’t save their assets and they were all liquidated. As the fashion world was moving forward, the company was not keeping up with the changes, and the teenagers no longer wanted to wear those rayon blouses, v-neck vests, so forth.
5 Paine Webber Bankruptcy
It was an asset management and stock brokerage company which was defunct in the year 2000, and attained by Swiss Bank. The founder of PaineWebber and company was William Alfred Paine, along with Wallace G. Webber in the year 1880, in Massachusetts.
It had to go with a merger with UBS SG, and with this merger UBS SG went on to the top of list known in the world. In the beginning it was named as UBS PaineWebber, which changed in 2003, after having this name of PaineWebber for almost 123 years, and was renamed.
4 Enron Bankruptcy
This is an Energy Company which is American, based in Texas. It was bankrupted in the year 2001 on December 2nd, with the assets of $65.5 billion. It was one of the leading company of its time, where there were almost 22,000 employs, known for pulp and paper, natural gas, communicator, and electricity companies which had revenue of $101 billion almost in the year 2000. For almost 6 years consecutively it was named as America’s best innovative company.
But it was reported as the Enron Scandal with the creative and systematic planned fraud, which was revealed in the year 2001 in October. With the largest bankruptcy of that time in American history it was also a huge audit failure. It has the liability of $23 billion with both of the guaranteed loans as well as debt outstanding.
3 WorldCom Bankruptcy
This was dated on 21st July 2002, with the assets of $103.9 billion. This company was founded in the year 1983, and was called Long Distance Service, which was renamed in 1995 to WorldCom. There were several huge mergers in this company which transformed it. In the year 1998 it was rechristened as MCI WorldCom. In 2002 there was a huge accounting fraud which was revealed, and was faced with some of the criminal charges.
So during Bankruptcy it changed the name to MCI again. The founder of the company as well as the former CEO both were sentenced to prison, Bernard Ebbers the founder for 25 years and Scott Sullivan CEO for 5 years. Scott Sullivan’s sentence would have been for a long time if he didn’t testify against Bernard and plead guilty.
2 CIT Bankruptcy
This went under bankruptcy in the year 2009. It was founded in the year 1908, and was a well known company. It was a leading company in factoring, transportation financing, lending based on assets, vendor financing, and equipment.
It was starving on cash, it went for another federal bailout but this was rejected in July, for which it was force to take loan for $3 billion which expanded more to $4.5 billion, but all of it didn’t work out and it was bankrupted.
1 Lehman Brothers Bankruptcy
This was one of the most famous bankruptcy of all time, with the assets of $691 billion, which is enormous, and went bankrupted in the year 2008. It was one of the well known financial service company globally.
It had appealed for protection on 15th of September, in the year 2008. It was the biggest bankruptcy in the history of United States, with holding such huge assets, and it was a great panic. The company’s shares kept dropping and became a liquidating company within no time.
10 Famous Companies that went Bankrupt
|No.||10 Famous Companies that went Bankrupt|
|1||Pacific Gas and Electric Co. Bankruptcy|
|2||Pan Am Bankruptcy|
|10||Lehman Brothers Bankruptcy|
Many companies have faced this, where some have overcome this phase, and some have just lost their path. So below is the list of top 10 such famous companies that went bankrupt.