chapter 11: June 2009 Archives

Two celebrity-focused jewelers fell victim to the recession this month.

First, Michael Beaudry, who is known for manufacturing and supplying jewelry to Hollywood stars, filed for bankruptcy June 4. Sister company Centerstone Diamonds filed for Chapter 11 on the same day. No information is available about the company's future plans.

Yesterday, Harry Dunay also filed for Chapter 11 bankruptcy, citing economic conditions. The business, which dates to 1965, sells its jewelry at high-end stores like Neiman Marcus as well as direct to celebrities. Harry Dunay plans on reorganizing the business and continuing operations.

Furniture retailer the Door Store filed for bankruptcy protection in late May. The Door Store, which was founded in Ohio in 1953, has had a drastic sales shift since the financial crisis began. High rents on large showrooms are being cited as the main cash flow concern. The company expects to fulfill all outstanding orders and continue operations.

Anchor Blue, a southwestern chain selling denim and other clothing, is closing and liquidating 46 stores. The closings are related to a bankruptcy filing from May (which somehow slipped past Eyes McGurk at Timely Demise). Anchor Blue had 177 stores before the closings; another 75 Most outlet stores were sold to Levi Strauss at the time of the Chapter 11 filing.

Tool supplier Western Tool filed for Chapter 11 bankruptcy last week to deal with a cash crunch. The company, which had as many as 61 stores across 13 states, is down to just over half that number. Western Tool plans on using the bankruptcy filing to "stabilize operations" and continue in business.

Following a week of speculation, clothing company Eddie Bauer filed for Chapter 11 bankruptcy today. The filing coincides with a plan to sell the business to a private capital group.

Eddie Bauer, which had 371 stores across the United States, is struggling with the usual combination of poor sales and mounting debt. The company traces its debt issues all the way back to previous parent company Spiegel's bankruptcy filing in 2003.

Extended-stay hotel chain Extended Stay Hotels filed for bankruptcy protection to mitigate a huge debt load. The filing, which pits the chain's new owner against its creditors, may have legal ramifications affecting many lenders and the U.S. government. No word is available on how the bankruptcy may affect Extended Stay Hotels' 680 locations.

Theme park operator Six Flags filed for bankruptcy this weekend after a lengthy struggle with its debt load. The company is defaulting on $1.8 billion in oustanding obligations. Six Flags is the largest theme park operator in the U.S., with 20 parks scattered around the country as well as in Canada and Mexico.

Six Flags vows that the bankruptcy filing will not affect park operations, which are reaching peak season as schools let out for summer.

Appco, the Appalachian Oil Company, is liquidating its assets as part of a bankruptcy proceeding. Appco operates 47 convenience stores in Tennessee, Virginia and Kentucky in addition to its oil business. The stores are being offered for sale, with no set plan for new ownership.

Genmar Holdings, which manufactures 13 different boat brands, filed for bankruptcy thanks to the credit crisis. As recently as last month the company had no expectations of a bankruptcy filing. Genmar's boat brands include popular lines such as Triumph, Windsor and Ranger.

Hendricks Furniture filed for Chapter 11 bankruptcy today, citing economic conditions. The company's rapid expansion into Drexel and Thomasville stores created cash flow issues exacerbated by the financial crisis. The company's restructuring plan is already underway.

Apparel retailer Oilily filed for bankruptcy, the latest victim of the economic crisis. The 33-store retailer sells women's and children's clothing in mall locations. Oilily was recently acquired; it previously declared bankruptcy in Europe and closed all European locations.The company has also closed 8 U.S. locations in recent months.

General Motors, once the largest automaker in the world, is filing for bankruptcy Monday morning, the latest step in a long process to try and save some of the company. GM, which has taken billions of dollars in government assistance, is expected to need another $30 billion to complete its reorganization.

The bankruptcy process, which should be complete over the summer, will result in the General's closing or selling many of the brands in its stable. Pontiac is following Oldsmobile into automotive history; Hummer is rumored to be near a sale, and in Europe, Opel was recently sold, with Canada's Magna taking the largest stake.

GM's filing comes barely a month after Chrysler announced its own bankruptcy. Chrysler, like GM, received government bailout funds ahead of its bankruptcy filing.

Op-ed: This author, while generally supportive of domestic manufacturing, has publicly endorsed GM and Chrysler's bankruptcies, and hopes Detroit's once-big three will be able to continue a proud American tradition.