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(Chicago Sun-Times)   Anatomy of a chain-reaction bankruptcy   (suntimes.com) divider line 85
    More: Interesting  
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7696 clicks; posted to Main » on 02 Jan 2003 at 5:10 PM (11 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2003-01-02 04:34:35 PM  
So basically, everything is WalMart's fault. Now the naysayers will start believing me!!

And before you ask, why do you think K-Mart filed?
 
2003-01-02 05:13:15 PM  
hmm, fascinating.
 
2003-01-02 05:13:50 PM  
Ouch. Poor Martha. I'd be mega-pissed if I was left out on 7 million dollars. Hell, I'd be pissed if I was left out on 7 dollars.
 
2003-01-02 05:14:50 PM  
 
2003-01-02 05:15:51 PM  
LMAO Stoffell were did you come up with that ?


not that i dout it but it would be great to have
 
2003-01-02 05:16:17 PM  
Care of Bartcop.
 
2003-01-02 05:17:13 PM  
Immediately, Williams knew the $7 million Kmart owed her South Side plastic container company would not be forthcoming.

Here's a hint: Don't let a company get 7 mil into you. It's your own fault Martha. Quit being such a dumbass.
 
2003-01-02 05:17:46 PM  
That's funny stoffel, but who was president when these companies got really really fat with over stated earnings and reficulous p/e ratios?

Crawl back under your rock.
 
2003-01-02 05:18:29 PM  
oops,

reficulous should be rediculous.
 
2003-01-02 05:20:12 PM  
Stoffel

Glancing quickly at your chart, I believe that the Democrats controlled at least one House of Congress at the time of each bankruptcy. Is there a causal connection there, or is it as meaningless an observation as yours?
 
2003-01-02 05:20:26 PM  

Public flea market.
 
2003-01-02 05:20:34 PM  
"In most cases, a small company taking a hit like that would literally put it out of business."

As opposed to being allegorically put out of business?
 
2003-01-02 05:21:05 PM  
Here's a hint: Don't let a company get 7 mil into you. It's your own fault Martha. Quit being such a dumbass.

Are you kidding? Many, many, many corporations had dealings with K-Mart into the hundreds of millions.
 
2003-01-02 05:21:24 PM  
that's 'ridiculous'
 
2003-01-02 05:23:01 PM  
Sentient: As opposed to being allegorically put out of business?

I was thinking of figuratively put out of business.
 
2003-01-02 05:24:15 PM  
Chapter 11...big deal. It's chapter 17 when the plot thickens and the murderer is revealed as Col Mustard in the Conservatory with the Candle Stick.
 
Zed
2003-01-02 05:24:16 PM  
"Here's a hint: Don't let a company get 7 mil into you. It's your own fault Martha. Quit being such a dumbass."

You do know how these companies work don't you? You must not or else you wouldn't have posted a comment like that.
 
2003-01-02 05:24:47 PM  
Some lessons in here I suppose:

1) control outstanding accounts

2) get in the line at the bankrupty proceedings. creditors that have already delivered product are first due settlements.

3) When a sector is dominated by a few mega-corporations, these chain reactions are deadly. Merger-mania has this type of risk built in it.
 
2003-01-02 05:24:50 PM  
I will always remember where I was and what I was doing when I heard the news of K-Mart's bankruptcy, much like Elvis' death.
 
2003-01-02 05:25:04 PM  
I'm not jumping on anyone's back here, but bear in mind that it really is unlikely that a current president can adversely affect the economy to the degree the above chart alludes. Macroeconomics has a ripple effect, and it takes around 10 years for a change in federal economic practice to actually affect the companies we see every day. It's not impossible, just unlikely, that our current president and the practices of his economic advisory board are the reason for companies today going under.

Ronald Reagan invested a ton of money in California-based technology startups, as well as giving them big tax-breaks for incentive to go public. That ushered in the dot-com boom and subsequent bust. It is that bust that we are feeling now, in combination with the events of terror in 2001. Economically-speaking, it's probably more fair to analyze the first George Bush and Bill Clinton if you want to dig into fed economic practices and their effects on the economy of today.
 
2003-01-02 05:25:20 PM  
WindyCityGrrl...I didn't want to say it, but somebody's gotta proofread.
 
2003-01-02 05:26:29 PM  
That's right Zed. I don't know dick. We just do business with Universal Studios, A-B, Wal-Mart, Disney, etc. None of them go more than 30 days or they don't get their product.

That's why we're still in business.
 
2003-01-02 05:26:49 PM  
merger mania also makes this type of instability more common, as big distributors can manipulate little companies into compromised positions in return for their blessing.
 
2003-01-02 05:27:17 PM  
Clicking on this crappy link takes you to many popups.
 
2003-01-02 05:27:54 PM  
MayoBoy

7 million could be one order for a company the size of K-Mart. It is not common business practice to request CIA (Cash in advance) payment for your customers unless they are severely delinquent or in the throes of Chapter 11 already. You request cash in advance, and they buy their shiznit somewhere else.
 
2003-01-02 05:29:33 PM  

Will the store be renamed Not O-K Mart ?


I got nuthin, just shop Smart. Shop S-Mart.

 
2003-01-02 05:29:56 PM  
Stoffel --

There are no presidents George Bush Sr. or Jr. President #41 was George Herbert Walker Bush. The current president is George Walker Bush. They don't have the same name, so there's no Sr. or Jr. involved anywhere.
 
2003-01-02 05:30:20 PM  
Cynning

The article said they do 15-16 million with K-Mart. They were owed almost half their yearly reciepts. That's just bad business. (as evidenced by the need to file for bankruptcy.)
 
2003-01-02 05:30:21 PM  
"But that money's not here...it's in Fred's House, and Bill's house, and Tommy's house..."



Whatever. I got nothing.
 
2003-01-02 05:31:46 PM  
Damn you KMart!!!
 
2003-01-02 05:34:51 PM  
You deserve to go bankrupt if:
1. 1 client owes you almost 50% of their yearly purchases
2. You can go bankrupt if 1 client doesn't pay up
 
2003-01-02 05:35:03 PM  
Bankruptcy sucks ass. Everyone loses except the lawyers.

I guess [b]Stoffel[/b] is saying that under the Dems, corrupt, fat companies were able to continue business as usual, but the Republicans forced them to face the music? Damn Republicans.
 
2003-01-02 05:35:14 PM  
Mayoboy

Some people like to put all their eggs in 1 hi-risk basket and cry like little beatches when it spills (see Enron 401K morons).
 
2003-01-02 05:35:49 PM  
This is too much work, but we'll try it again...

Damn you KMart!!!

 
2003-01-02 05:36:24 PM  
Damn bulletin boards and their damn use of damn real HTML instead of the fake damn UBB codes. Meant to say Stoffel above.
 
2003-01-02 05:36:30 PM  
Mayoboy, I worked for a company who provided a salable good to Wal-Mart (through a 3rd party--so we were a bit insulated), but it was not uncommon for Wal-Mart to be 180 days behind in payables. We were a small company, so we could not afford to complain about them, nor did we have the power to negotiate better payment terms. Wal-Mart will just sever the relationship and buy from the competition or drop the line altogether. Same for K-Mart. They are the big boys and they write their own rules. A consistent customer with late payments is better than no customer, in some cases. Doesn't make sense in Business-school terms, but the reality of the market is that these guys will take as long as possible to pay to make thier cashflow more positive, and if you are an SBE company you either take it in the teeth or risk losing not only a big customer but the ability to tell OTHER customers "Hey, we supply to X".

I'm not flaming your commentary--just providing another real-world example.
 
2003-01-02 05:37:05 PM  
Bankrupcies for some, cheap foreclosure housing for me.
 
Zed
2003-01-02 05:39:28 PM  
Mayoboy we all know the people filling boxes and loading trucks don't get inside knowledge into the economic stability of the company. Go pick up your metal lunchbox and head on home.
 
2003-01-02 05:40:41 PM  
I thought the fact that Kmart had shiatty service and didn't like to keep their stores stocked is what put them out of business, not Walmart.
 
2003-01-02 05:41:19 PM  
I never let my receivables go over 30 days, on the 31st day I'm all over them like a fat kid on a smartie. If payment is not forthcoming fast they get dinged 2%. Got no problems meeting our obligations and our suppliers like us so much they give us discounts (anywhere from 2% to 15%).
Martha, get a more effective accounts receivable department.
 
2003-01-02 05:41:26 PM  
I understand that Cynning but that's how people get into trouble. When you start letting another company dictate how your company does business, you've lost control of your company.

We've had companies (Vegas Casinos are the worst) try and dictate terms to us. They've told us that "we pay on our terms and you'll get your money when we are ready to pay you". We've then said "Fine, you'll get your product when we get our money. Don't like it, go someplace else." Since nobody else does what we do, the way we do it, they end up coming back to us with a check in hand.
 
2003-01-02 05:42:48 PM  
That's right Zed, if you don't have a defensible position, resort to insults.
 
2003-01-02 05:45:13 PM  
"It's like the domino theory of stupidity...everyone knows that! And you are dumb for not knowing that."

/Spaceghost
 
2003-01-02 05:46:31 PM  
First off, Stylemaster should have better controlled it's A/P and A/R procedures with KMart and maybe they wouldn't be in this mess. Yes company's do work on credit but from the company's statements it sounds like KMart was not paying them in a timely manner, which means they probably were beyond the 90-day mark.

Cynning: Actually current president's have a HUGE impact on the current economy. Yes, economic downturn does happen however the present administration's laissez-faire attitude towards monopolization and globalization of the national (and global) economy is having huge negative impacts on the health and stability of said economy. Bush is basically destroying every government regulation made to protect workers' rights, the environment, economic health, anti-monopolization, and small businesses and bringing in more tax cuts for the wealthy and seeking to increase privatization of government services. Since his inauguration, he has thrown his support behind corporate and monied interests while merely playing lip service to the middle and working classes while doing nothing to support them.
 
2003-01-02 05:46:42 PM  
MayoBoy
I understand that Cynning but that's how people get into trouble. When you start letting another company dictate how your company does business, you've lost control of your company.

Exactly - but, when you're a small compnay and you start dealing with a big company, the prospective business is likely too tempting to stick to your guns.

We've had companies (Vegas Casinos are the worst) try and dictate terms to us. They've told us that "we pay on our terms and you'll get your money when we are ready to pay you". We've then said "Fine, you'll get your product when we get our money. Don't like it, go someplace else." Since nobody else does what we do, the way we do it, they end up coming back to us with a check in hand.

You're one of the lucky ones then. Most companies can't say that, and I've heard stories about Walmart and what they do to their suppliers. Once a customer has such a stranglehold on youir business, when they tell you to bend over and grab your ankles, you smile when you do it.
 
2003-01-02 05:46:51 PM  
::giggling at ProvenItchFighter even though I couldn't get my gif to post either::



The cold is lingering and I'm always looking for a new whine! lol
 
2003-01-02 05:46:51 PM  
This article would have been much better if the writer had done any reading about bankruptcy proceedings before writing it.
 
2003-01-02 05:48:22 PM  
I believe the numbers and names on that chart tell a story.

Much like the heat from a nuclear blast tells a story.
 
2003-01-02 05:48:44 PM  
Dogfather_jr

We had a chance at the Bellagio but we decided it would either make us millions or bankrupt us. We chose not to do it as we would have had to turn down to much other work. In light of all of the lawsuits surrounding it now, it was the best decision we ever made.
 
2003-01-02 05:49:06 PM  
No shiat Zed, I see you also live in Austin. Are you that asshole doing 60 in the passing lane everyday on Mopac that I want to run off the road?

Please tell me your a transplanted Californian. Austinites usually are pretty cool.
 
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