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Full-Text Articles in Law

Death Of A (Used Car) Salesman: An Examination Of The Incredible Auto Sales, Llc Bankruptcy, Alicia Teubert, Melissa Carraso Apr 2010

Death Of A (Used Car) Salesman: An Examination Of The Incredible Auto Sales, Llc Bankruptcy, Alicia Teubert, Melissa Carraso

Chapter 11 Bankruptcy Case Studies

At first glance, the Incredible Auto Sales, LLC (“Incredible Auto”) Chapter 11 bankruptcy appeared fairly standard. A once prospering business found itself in the red trying to keep its inventory stocked, pay its bills, and remain a going concern. On paper, the prospects of reorganization seemed promising. It had nearly $2 million worth of inventory. It had nearly $200,000 worth of machinery, fixtures, parts, and supplies. Plus, there was a market for its product because Incredible Auto was the only Kia MotorsAmerica (“KIA”) dealership in a 250-300 mile radius. However, the Incredible Auto on paper was not the same ...


Active Ride Shop : Chapter 11 Bankruptcy, Matt Fink, Philip Meyer Apr 2010

Active Ride Shop : Chapter 11 Bankruptcy, Matt Fink, Philip Meyer

Chapter 11 Bankruptcy Case Studies

In 2008, hundreds of people waited in the rain for the grand opening of Active Ride Shop’s new Chico Hills location, its twenty-sixth store and its biggest opening event yet. In the same year, Active was awarded the Surf Industry Men’s Retailer of the Year Award, yet less than a year later the company would file for chapter 11 protection. This paper will explore Active’s financial downturn and resulting chapter 11 case, inform the reader about the workings of the chapter 11 process, and impart an understanding of how the process works in the context of a ...


Appalachian Oil Company, Inc.: A Company's Journey After Running Out Of Gas, Allison S. Jackson, Raymond G. Lewallen Jr., Jennifer T. Mcginn Apr 2010

Appalachian Oil Company, Inc.: A Company's Journey After Running Out Of Gas, Allison S. Jackson, Raymond G. Lewallen Jr., Jennifer T. Mcginn

Chapter 11 Bankruptcy Case Studies

When Appalachian Oil Company, Inc. filed for Chapter 11 protection on February 9, 2009, it marked the end of an era for a company with more than eighty-six years of experience in the petroleum products industry. The company’s failure was attributable to a couple of factors, including the worst financial crisis since the Great Depression and a parasitic parent company. The combination of a lack of operating income and access to credit rendered the company insolvent and unable to continue its operations. Appalachian Oil Company, Inc.’s journey through Chapter 11, however, was unique in that it never reemerged ...


In Re Crabtree & Evelyn: "Almost Washed Up", Kristina Chuck, Lin Ye Apr 2010

In Re Crabtree & Evelyn: "Almost Washed Up", Kristina Chuck, Lin Ye

Chapter 11 Bankruptcy Case Studies

Crabtree and Evelyn (“C&E”) started in 1972 as an outlet of fine soaps from all over the globe. The name was derived from the crabapple tree and John Evelyn who was a Renaissance Englishman who had works on the conservation of forests and timber. Over the almost forty years since then it has expanded what it has to offer from fine soaps to a variety of other products including “personal care products and related accessories, fragrances, comestibles (i.e., food products including cookies, teas and jams), products for the home and gift arrangements.”

It also “manufactures and distributes more than twenty-five product lines, including LaSource®, Gardeners, India Hicks Island Living® and Naturals and its products have been frequently mentioned in numerous magazines, including Vogue, Glamour, and Lucky.” Since opening its first retail store in 1977, C&E has expanded to 126 stores (at petition date) and has added a manufacturing and distributing facility. In 1996, 100 percent of its equity was purchased by Kuala Lumpur Kepong Berhad (“KLK”), a “Malaysian public limited liability company, the stock of which is publicly traded on the Kuala Lumpur stock exchange.”

C&E sells its products through multiple channels, including its retail stores (56%), wholesale business (12%), export business (5%), affiliate sales (21%), and the internet (6%). Among them, firstly, as previously mentioned, C&E operates 126 stores in 34 states some of which were full-price merchandise and outlet stores. The outlet stores sell “larger quantity …, discontinued … and slow moving product[s].” Secondly, C&E sells its products through “gift shops, home specialty stores and country stores” including Hallmark. C&E also uses affiliates to distribute its products. These affiliates rely on C&E to supply them with the goods for purchase. Most of these goods are already finished; however, there are some that need to be packaged by the affiliates. There are over 130 C&E retail stores outside of the United States that are operated by C&E affiliates. C&E also exports its products to various gift stores in Mexico, Panama, Japan, and Taiwan. Finally, C&E’s customers are able to obtain its products on its website, www.crabtree-evelyn.com. C&E is able to track its customers using the information from a database. The website “offers internet-only promotions, provides customers with the opportunity to sign up to obtain exclusive email-only ...


Tragedy On The Descent: The Ascent And Fall Of Eddie Bauer, Austin Fleming, Bryan C. Hathorn Apr 2010

Tragedy On The Descent: The Ascent And Fall Of Eddie Bauer, Austin Fleming, Bryan C. Hathorn

Chapter 11 Bankruptcy Case Studies

For many entrepreneurs, bankruptcy is the unfortunate end of what began as a business dream. The birth of a business is an exciting time for the entrepreneur, but its death is often a painful process—both for the company's owners and its creditors. Those businesses that choose not to reorganize close their doors forever. However, reorganization can often salvage a business enterprise that is a good one but is impaired by debt, crisis, or simple bad luck.

The goals of the reorganization process are clear—the idea is to produce a viable business enterprise but one not necessarily owned ...


Rethinking Professional Fees In Chapter 11 Cases, Nancy B. Rapoport Jan 2010

Rethinking Professional Fees In Chapter 11 Cases, Nancy B. Rapoport

Scholarly Works

This article discusses the many ways in which professional fees can spiral out of control in chapter 11 bankruptcy cases and evaluates the possible ways to monitor and control those fees.


Chrysler's Bankruptcy: Money Laundering On A Grand Scale, James J. White Jan 2010

Chrysler's Bankruptcy: Money Laundering On A Grand Scale, James J. White

Articles

The interesting issue in Chrysler is not the lawyers’ manipulation of the law; it is the politicians’ use of the bankruptcy to launder money. Had the President simply announced that the federal government would give $4 billion to the UAW, the public, even the public in the UAW’s home state of Michigan, would have been up in arms. By laundering the money through the Chapter 11 process, the administration disguised the payment and avoided the outrage.


Government Involvement In Chrysler Bankruptcy: The Least-Worst Alternative?, John A. E. Pottow Jan 2010

Government Involvement In Chrysler Bankruptcy: The Least-Worst Alternative?, John A. E. Pottow

Articles

As usual, my colleague Jim White has hit many nails on many heads. Also as usual, however, I’m going to be a pain and part ways with him a bit. First, was Chrysler’s bankruptcy “suspicious” in its use of section 363 of the Bankruptcy Code? You bet. Leaving aside the proliferation of 363 sales to swallow Chapter 11 as we once knew it, Chrysler was out in left field. Not only was it a “sale” of everything meaningful in the company, it was to a seller—Fiat—that put in no money. (To be fair, Fiat agreed to ...