Some of the biggest companies and best-known brands in the world have been reported as filing bankruptcy at one time or another. Sadly, in the recent recession, many of America’s most respected household names have been the subject of much public scrutiny for filing bankruptcy under the laws of chapter 11.
The largest case of filing a bankruptcy in the history of the United States is that of Lehman Brothers, listing over $600 billion in assets. The company was reported as filing bankruptcy under chapter 11 laws on September 15, 2008. Its bankruptcy severely affected the U.S. economy and drew severe criticism over the exorbitant wages that were paid to executives even when the company was in preparation for filing bankruptcy. Shortly after this case of a major corporation filing bankruptcy, another household name, this time Donald Trump, was the subject of headline news across the globe.
In February 2009, just over four years after filing bankruptcy under its previous name Trump Hotels and Casinos, Trump Entertainment Resorts was reported as filing bankruptcy, listing assets of $2.06 billion, and a debt of $1.74 billion. Trump Entertainment Resorts couldn’t avoid filing bankruptcy after the recession caused a nose-dive in the gambling industry and sorely affected the company’s earnings. Founder Donald Trump quit the board just days before Trump Entertainment Resorts was reported as filing bankruptcy. In April 2009, after a prolonged slump in sales, automaker Chrysler was reported as filing bankruptcy.
Because President Obama hailed Chrysler as one of the pillars of the U.S. industrial economy, it received over $7 billion as a bailout from the government and managed, in expedited bankruptcy protection, to negotiate a reorganization deal with Italian automaker Fiat. How Chrysler’s reorganization was conducted, as well as the fact that there will be no repayment of the taxpayers’ money that was used to bail the company out, has drawn much criticism.
A month after Chrysler gained much public attention for filing bankruptcy, another major U.S. automaker, General Motors, was reported as filing bankruptcy in June 2009 – despite over $19.4 billion in federal help. During its reorganization after filing bankruptcy, the government promised another $30 billion to the ailing automaker. GM’s bankruptcy has had a severe impact on many Americans. Thousands of employees lost their jobs due to the closing of manufacturing plants and dealerships, and over 650,000 retirees lost their GM health insurance. Investors in GM bonds
received new bonds in the company after its reorganization, but the new bonds were worth a mere fraction of the original investment, and investors who held shares in GM saw their investments disappear.