chapter 11: September 2009 Archives

This one's not recession related, but it is interesting: Jolt Cola filed for bankruptcy protection after experiencing problems sourcing new packaging. Jolt ordered 90 million "23.5 ounce resealable cans" from a supplier but has received just 30 percent of its order. The lack of supply forced Jolt to make alternate accommodations, and the resulting moves created a capital crunch that the company doubts it can fix.

No word yet on whether this will have any impact on Jolt's operations, although the lack of packaging would suggest Jolt becomes harder to find in the coming months.

A pair of high-profile Manhattan dining institutions filed for bankruptcy in recent days. Café des Artistes, an Upper West Side classic, made its filing this week after closing its doors last month. The restaurant had been open since 1917 and is well known for its murals and protracted meals.

A few blocks away, Tavern on the Green filed for bankruptcy as well, although its current owner promises to continue operations until the end of the year. Unlike Café des Artistes, which has closed for good, Tavern's operating license has been sold to another operator, who takes over in 2010.

The pair are the latest casualties in a difficult year for restaurants; several notable high-end eateries, including La Goulue and Payard, closed in recent months. The Bloomberg article linked above notes New York's restaurant industry, an integral part of its social and economic infrastructure, has declined 11 percent this year.

The retail unit of Samsonite Luggage filed for Chapter 11 bankruptcy last week, with plans to rapidly close 84 stores. The move is designed to increase profitability by halving the number of existing retail outlets. Merchandise is to be liquidated this fall.

Samsonite expects no disruption of business beyond the proceedings and store closings. The company blamed the recession's impact on travel as the main driver of the bankruptcy filing.