Famous Bankruptcy and Bankruptcy Fraud
A Sacramento bankruptcy lawyer sites some famous bankruptcies and bankruptcy fraud cases
The following are five cases of famous bankruptcies and bankruptcy fraud cases:
Atkins Nutrionals
The famous Atkins Diet that swept the in 2003 by Dr. Robert Atkins, had the answer to weight loss via his New Diet Revolution: cut the carbs, dummy! However, after a short run, and amidst much controversey over its founder's death (obesity? kidney failure?), combined with intense competition from other diet plans, the company to file for Chapter 11 bankruptcy protection. A famous bankruptcy. Though it did recover just under six months later, the diet would never approach the popularity it once famous enjoyed.
Edmonton Oilers Owner
Peter Pocklington, former owner of the Edmonton Oilers, was arrested at his Palm Springs-area home on charges of bankruptcy fraud for allegedly concealing assets during bankruptcy proceedings, according to a news release from the office of the United States Attorney, Central District of California.
Famous for owning the Edmonton Oilers, Pocklington filed for personal bankruptcy in August 2008, citing debts of approximately $19.6 million US. In his bankruptcy petition he said his assets totalled essentially only $2,900, inclduing $300 worth of clothing and shoes.
The U.S. attorney's release said the petition "raised suspicions that he was not disclosing all of his assets to the Bankruptcy Court."
Delta & Northwest Airlines
Both companies have histories dating back to the 1920s. Northwest was founded in 1926 with the intention of hauling mail for the US Post Office Department. Delta was founded in 1924 as a crop dusting company. Both enjoyed rises through the 70s and 80s, growing into two of the nation's top passenger airlines.
However, there were two aspects that wouldn't get better for the two companies: low-fare competition and fuel costs. Airlines like Southwest and JetBlue were gaining momentum, leaving the older companies with a much more even market. It was fuel costs that would ultimately lead the two companies to file for Chapter 11 bankruptcy protection on the same day, September 15, 2005
Covad Communications Group
Covad Communications Group was founded in 1996, and just a calendar turn later had launched the first commercially available DSL service. By 1999, they were offering these DSL services to local phone companies, which would then be passed on to their customers. The world of broadband Internet was growing, and Covad was at the helm.
However, their reign would not last long. Soon after the turn of the millennium, cable Internet services were introduced. While there were a few drawbacks -- an entire block was shard a fixed bandwidth -- cable Internet was generally much faster than DSL. This took some steam out of the DSL industry. When coupled with Covad's ongoing problem of unreliable installation and service, it spelled doom for the company.
They filed for Chapter 11 bankruptcy protection in August of 2001, citing $1.4 billion in debt. Some quick arrangements were made to temporarily satisfy its creditors and shareholders, which
Thinking Machines Corporation
Supercomputers were all the craze in the early 1980s, as consumers felt they were getting a glimpse of the future. Enter Thinking Machines Corporation, brainchild of MIT grad Danny Hillis.
It took Hillis quite some time to make his company profitable. It took a number of contracts from the Defense Advanced Research Projects Agency (DARPA), an agency of the US Department of Defense, to finally achieve profitability in 1989. However, there were cries of foul play from competing companies like IBM. When DARPA began more evenly distributing its contracts, Thinking Machines began suffering losses.
In August of 1994, the company filed for Chapter 11 bankruptcy protection, selling a majority of its to Sun Microsystems.
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