In June 2015, EU Regulation 2015/848 of 20 May 2015 on insolvency proceedings entered into force. This Regulation reformed – or, to be more precise, recast – EC Regulation 1346/2000, in order to tackle in a much more modern way cross-border insolvency cases involving at least one Member State of the EU (except Denmark).
The post A new European Regulation on insolvency proceedings appeared first on OUPblog.
Since the global financial crisis in 2008, the world has paid close attention to corporations and banks around the world that have faced financial trouble, especially if there is some aspect of scandal involved. The list below gives a brief overview of some of the most notorious company implosions from the last three decades.
The post Top 5 most infamous company implosions appeared first on OUPblog.
The NY Times offers an infuriating and detailed article about the recklessly stupid Rhode Island politicians who gave $75 million to baseball player Curt Schilling so he could launch a video game company. Predictably, Schilling’s company, 38 Studios, not only failed to deliver the online role playing game it set out to make, it accrued $150 million in debt in just two years before the company collapsed last spring and left the state’s finances in ruin. With so much discussion about government subsidies and incentives for VFX and film production, there’s a valuable cautionary tale in here somewhere:
And yet, you don’t have to dig very hard into the record to find that there were plenty of serious-minded advisers who tried to warn state officials away from 38 Studios. Among them, apparently, was the corporation’s own financial portfolio manager, Sean Esten.
According to the state’s pending lawsuit, Mr. Esten was alarmed that 38 Studios’ worst-case projection for its business seemed to rely on releasing a successful game every two years — a track record that most gaming companies can only dream of.
“I don’t think I can support a $75 million guarantee to any single company in this industry due to the wide volatility in commercial success of game releases,” Mr. Esten told his bosses in an e-mail. “Perhaps we should develop a toolbox of incentives (including loan guarantees) to attract companies into a cluster and not rely on a single company to build the cluster around.” According to the state’s complaint, Mr. Esten’s bosses decided to bury his analysis.
Another skeptic was Gina Raimondo, a Democrat who was running for state treasurer at the time and now holds the office. Ms. Raimondo spent the previous decade working in venture capital, and after reading about the proposed investment in July 2010, sent an unsolicited and eerily prescient e-mail to Keith Stokes, who was then the corporation’s executive director and the deal’s main architect.
“In general, I would proceed very carefully on this,” Ms. Raimondo wrote. The company “is in the Boston area where there are 200 venture capital firms, and it is in a very hot area of gaming so if it were in fact a compelling investment I would have to think it would be well funded already by venture capitalists; the fact that many have looked at it and passed is a red flag.”
STATUS: Leaving for Bologna, Italy on Friday for the Book Fair. Ack!
What’s playing on the XM or iPod right now? SET FIRE TO THE RAIN by Adele
I also have some land 100 miles west of Ft Myers I'd like to sell you….
What would I week be without an update on Dorchester? I can't imagine what company would be interested in buying an ailing organization with such a significant amount of debt. I don't have updated numbers from the phone call last year but back then, debt owed was in the millions.
Maybe it's good for the taxes.
But straight from the horse's mouth, here is a letter from Dorchester's president.
STATUS: Only 65 emails in the inbox to start the day!
What’s playing on the XM or iPod right now? I FEEL THE EARTH MOVE by Carole King
Wait! What is that I hear? I think it's the wind whistling down Park Avenue and through the Dorchester non-existent office space.
In a world where information is found in a quick Google search, why try and dissemble?
Here is a link to a notice to Dorchester of foreclosure for the note and a sale of the assets that were pledged as security on a loan.
Back to my question. Why do I say that I don't think I'll see a bankruptcy filing soon? By the way, this is not a statement of fact. Simply a supposition on my part.
I don't think Dorchester will file unless forced to. It's costly to file and go through the process. Meanwhile, monies are coming in and not being paid out.
Last year when my lawyer and I sat in on the phone calls where Dorchester disclosed their financially precarious position, the list of creditors was part of that conversation. There are at least 6 companies that might find it worthwhile to force Dorchester into Bankruptcy to recover monies owed.
And I hope they do.
But to be blunt, those companies will crunch the numbers. If they come out ahead in what they will recover versus what it will cost, then my guess is they will do it. It certainly won't be altruistic.
Struggling bookseller Borders reportedly needs to secure $50 million in additional financing for reorganization efforts. Currently, it has a $505 million debtor-in-possession loan.
According to Bloomberg, the company projects that sales will drop to $1.5 billion. The New York Times reported that some publishers think the bookseller may close more brick-and-mortar stores.
Here’s more from the article: “Some publishers are spurning the reorganization the chain proposed to them privately, said a person familiar with the publishers’ strategy. At least one deems the revenue projections unrealistic because Borders no longer has enough stores to generate those sales, said the person, who declined to be identified because Borders’s presentations aren’t public.” (via BookTV)
New Career Opportunities Daily: The best jobs in media.
After delaying its annual report, Borders revealed in court documents that dozens of corporate employees have quit since the struggling bookseller filed for bankruptcy.
The Detroit News has the scoop: “Of the 47 employees who left the ailing Borders Group Inc. since it declared bankruptcy on Feb. 16, two dozen quit this month, Borders’ attorneys said in court documents. The departure of two unnamed executives — a senior vice president and a vice president — earlier this month leaves 15 people in senior management positions.”
The company has felt this staffing crunch. Last night Borders revealed that it will not make its annual report filing deadline for the SEC. The filing explained: “the Company has been required to devote a substantial portion of its personnel and administrative resources, including the personnel and resources of its accounting and financial reporting organization, to matters relating to the Chapter 11 Cases.”
New Career Opportunities Daily: The best jobs in media.
Remember that there's stuff they can sell without selling the company. If they are not in bankruptcy they can sell assets, such as publishing contracts (subject to the terms of those contracts, of course) and inventory.
The "Dear Valued Authors" bit is particularly charming ...
Hmm...I could see Amazon buying up the company, paring it down, and moving it to Seattle to bolster their foray into the publishing industry.
Indeed, that's the UPS Store.
What a horrible mess.
Yes, what a terrible, horrible financial mess. Makes my head spin. If I thought about it long enough, it'd probably give me a headache. I doubt they'll find a buyer, but, they might sell bits and pieces of their assets as somebody already suggested...
Oh wow. Interesting.
Hope you have a fabulous time in Italy! I hope I read that right. If so, that's so exciting!
Nothing says 'sincere' like 'Dear Valued Authors & Agents.' *I'm* convinced.
Must be really cramped, in that UPS mailbox where they're holed up.
Kind of ironic that you’re leaving a city called Bologna while Dorchester is trying to unload itself on people.