One sign of our depressed economy is the ever-growing list of companies that are seeking bankruptcy protection. The latest is Hostess Brands, the manufacturer of Wonder Bread, Ding-Dongs and the ever famous Twinkies, filed for chapter 11 bankruptcy protection. I guess they ran out of dough. This is the second time that Twinkies have been in bankruptcy court. Whatever was in that secret filling, it wasn’t bringing in enough money to pay for employee pension costs, which have grown exponentially - perhaps because of eating Twinkies.
It’s been a busy few months for bankruptcy. Borders had problems with its books, Blockbuster went bust, Sears is closing a lot of stores across the nation. You know about MF Global, Corzine’s personal Titanic. The L.A. Dodgers struck out and are trying to sell the team. Cosmetic surgery company, American Laser Centers, has burned out its cash and is trying to raise more in Chapter 11. Lending company The Money Tree is getting chopped down to size in a Chapter 11. Mortgage insurer, PMI Group, fell behind on its own payments. Dippin’ Dots took a dip. Filene’s is down in the basement, and Syms is singing hymns in heaven.
Did you know that 92 banks failed last year?
Since household debt almost equals our nation’s gross domestic product this year, people are cutting back on expenses, which obviously hurts more companies, which should drive more bankruptcies.
Except it hasn’t.
It’s funny because on paper, bankruptcies are down. Personal bankruptcies fell by 11% last year. For publicly traded companies, filings are actually down 17%. But a drive down a New Jersey highway doesn’t tell the same story as the statistics do. Einstein-Moomjy is now in the midst of a bankruptcy liquidation sale. A few Staples stores have closed. The parent company of American Airlines filed Chapter 11. Just look at all the “final clearance” signs and empty storefronts.
What about 2012? Best Buy is a potential candidate this year. Kodak is struggling to sell patents and sue patent infringers to raise cash. The landlord for Bank of America is facing foreclosure. China growth is slowing down. The Euro is still in trouble. Some pundits are predicting you will see the end of Perfumania, American Apparel, newswire service Thomson Reuters, Sony Pictures, Nokia, Soap Opera Digest, Sony Ericsson, MySpace, Kellogg’s Corn Pops, Dollar Thrifty,
By the way, I am not giving investment advice and I don’t own or invest in the stocks I listed. Good thing.
Like I said, on paper, things are looking better. On paper. Too bad, we don’t live our lives on paper.
Marvin Wolf is a regular satirical contributor to Local Talk.
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