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Big Boys of Bankruptcy

by rifek Thu Jan 19th, 2012 at 02:40:42 PM EST

There is a lot of shifting going on in major, US Chapter 11 bankruptcies.  Cross-posting this from both my blogs for the edification of all.

Kodak finally filed last night.  It had been in trouble for a long time (I think I'm one of the few fossils remaining who uses film.), but it was trying to reshape itself as a printer company.  To do so, it was relying on a revenue stream from its patent portfolio (At one time that portfolio rivaled the likes of Bell Labs and IBM.).  Unfortunately, Kodak didn't account for aggressive (i.e. predatory) behavior by some major license users, including Apple and Research in Motion (I have to say I don't use much of anything from Apple.  I hate black boxes, so I didn't care much for the products, and I didn't care for the culture, either.  Seemed too much like a religious cult.  I see people walking around festooned with 500 i-Crap products, and I wonder why anyone needs to be so simultaneously plugged-in and cocooned from the world.  They remind me of Neo in The Matrix before he's released from his pod.  RIM, though, hurts.  I've rocked the Crackberry for over a half-dozen years now.).  The big users decided to stop paying for the licenses, forcing Kodak to litigate.  They wouldn't buy the patents outright, either, at least not for more than a dime on the dollar.  So Kodak is in Chapter 11, where it might be able to force a few things.

American Airlines, on the other hand, might be getting forced.  It's nearly two months since it filed, and American has barely gotten off square one.  As I blogged the day it filed, American's big motivation was to take down the labor contracts and pensions.  It hasn't, and everyone (including Your Truly) is confused about the delay.  Confused about it, but still willing to take advantage of it.  Delta and US Airways are making noises about rival bids, and others are getting into the game.  If American doesn't have a reorganization plan in front of creditors in two months, it's looking at getting parted out.

And of course we can't let the day go by without some more mess from MF Global, this time with a heapin' helpin' of JPMorgan Chase.  It seems that back in October, right before it filed, MF Global was selling piles of assets to raise cash.  Problem was, it was selling them through JPMorgan, which decided to do a by-the-book slowdown of the transactions.  Consequently, MF Global had neither the assets nor the cash and couldn't meet the inevitable margin calls.  Welcome to bankruptcy.  Now the creditors and trustee are finally getting around to asking JPMorgan where the money went, because it certainly hasn't been turned over.

JPMorgan's involvement in "where did it go" scenarios is getting to be a habit, and it's long past time someone pulled the curtain back and took a look.  Somebody needs to look at where Washington Mutual's assets went, because they were there until JPMorgan stepped in.  And unless something drastic has happened this week, JPMorgan is still sitting on piles of cash involved in investment schemes from five and six years ago (I have to be careful here.  I've had two, executive-VP-level in-house counsel lie to me about the creation and handling of those accounts, so it's hard to say what the "official" records look like any more.  And I've had outside counsel threaten me with bar discipline for daring to represent anyone opposing JPMorgan.  But then that's SOP for Utah.  The Bar doesn't care if an attorney makes a groundless threat like that so long as he is representing a 1% client and he makes it against an attorney with a 99% client.).  Any wonder I refer to the place as "JPMorgoth"?  We'll see if anybody decides to use the big microscope this time or if JPMorgan skates again.

Speaking of Kodak:

Why Waiting Until A New Business Model Is Proven Doesn't Work | Techdirt

In 1997, I did work with a professor who was consulting for Kodak, and we did a detailed report on why Kodak needed to embrace digital now. The response? Kodak told us "yes, yes, digital is important, and we'll be ready to switch, but right now, chemical processing of photos is so much cheaper, there's no reason to change yet." And, they were right that it was a lot cheaper, but they were wrong about the time to start switching.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu Jan 19th, 2012 at 05:12:07 PM EST
from the last century (1999). It was my main camera for nearly a decade. I thought then that they were going to make the transition OK, but I suspect they were obsessed with their own exceptionality.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Fri Jan 20th, 2012 at 03:53:33 AM EST
[ Parent ]
Believing you are the exception to the rule is an express ticket to the dust bin.
by rifek on Fri Jan 20th, 2012 at 03:32:16 PM EST
[ Parent ]
by njh on Fri Feb 3rd, 2012 at 01:42:17 AM EST
[ Parent ]
apparently getting to be number one almost guarantees that lazy thinking and fossilised worldviews become paramount.

we're the best, we can coast, innovation is for the desperate little guys. entitlement again...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Jan 30th, 2012 at 02:15:19 PM EST
I've had outside counsel threaten me with bar discipline for daring to represent anyone opposing JPMorgan.  But then that's SOP for Utah.

I never realized the extent to which Utah is just a very peculiar part of the South - a Mormon plantation.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Feb 1st, 2012 at 10:37:18 AM EST
Joe Hill, man, Joe Hill.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Wed Feb 1st, 2012 at 10:45:15 AM EST
[ Parent ]
The Americans airlines delay is interesting.

Utah is an odd place - I saw the oddest bankruptcy process there where a company with huge debts did a barely announced rapid fire auction of itself to its local church affiliated investor on the courthouse stairs with no competing bids. All debts and no assets were left behind for the luckless creditors.

by rootless2 on Wed Feb 1st, 2012 at 01:37:06 PM EST
Care to say who the judge was?
by rifek on Fri Feb 3rd, 2012 at 11:32:23 PM EST
[ Parent ]
never knew.
by rootless2 on Sat Feb 4th, 2012 at 10:29:12 PM EST
[ Parent ]
AA is moving forward, but the government pension insurer is not playing along.
by rootless2 on Sat Feb 4th, 2012 at 10:32:13 PM EST

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