10 ONCE-DOMINANT BUSINESSES THAT ENDED UP DECLARING BANKRUPTCY

10 ONCE-DOMINANT BUSINESSES THAT ENDED UP DECLARING BANKRUPTCY
By Business Insurance, 2 February 2012.

When a company's name becomes practically synonymous with the industry it's in, it seems impossible that the business could ever fail. It'd be like Coca-Cola going under even though a large chunk of the population refer to all sodas as "Coke." But even the most recognizable businesses sometimes can't adjust to changes in the market or overcome financial troubles. These companies were once the top in their field, but fell to the point where filing bankruptcy was their best option.

1. Kodak

We're barely into 2012 and a major company has already filed for bankruptcy. Eastman Kodak, the ground-breaking photography company that's been around since the late 1800s, saw its stock drop 35% after they filed for Chapter 11 bankruptcy in January. The age of digital photography seems to have caused some innovation problems for the business that made a name for itself by selling cheap cameras and making most of their profit through film and supplies to print photos. Once those money-making elements started to become obsolete, Eastman Kodak found itself with $6.75 billion in debt. Not exactly a Kodak moment for the company.

2. Enron

Even if you were too young to understand it all when the trouble went down, you've probably at least heard of Enron, which became synonymous with corporate greed and corruption. In 2000, the company was considered a leading business in electricity and natural gas, along with several other services. By the end of 2001, Enron had filed for bankruptcy after it came out that they'd been cooking the books regularly. The scandal affected corporations all over the U.S. by calling into question corporate accounting practices in general, which led to a federal investor protection act, and affected employees and investors with the company who lost jobs or huge amounts of money (or both).

3. Blockbuster

We still remember Blockbuster, right? We used to go there before hosting a slumber party or having a date night at home to pick up the newest releases to snuggle up to. There's no doubt that it stole the show from its red-headed stepbrother, Hollywood Video, and any mom-and-pop rental stores in town. Once RedBox and Netflix came around, though, it was harder for Blockbuster to hold onto their dominance in the home entertainment industry, and in 2010, the company was forced to file for bankruptcy. Dish Network won the enterprise at auction in 2011.

4. Schwinn Bicycle Company

Schwinn has been the quintessential bike for kids and adults alike since the company gained overwhelming popularity in the '60s. So you'd probably be surprised to hear that the company of the perfect cruising bike has declared bankruptcy twice. By 1990, many other bicycle brands were gaining traction in the market and Schwinn began exporting production to save money. By 1993, they had declared bankruptcy. The company was bought by an investment group. In 2001, it filed for bankruptcy again, and was purchased by Pacific Cycle at auction.

5. General Motors

General Motors was consistently considered the leading automaker in the world for 77 years, up until 2007. With mounting debt and a poor economy, the government pushed them toward Chapter 11 bankruptcy in 2009. This company, though, seems to have a success story compared to some other bankruptcy tales, though it's still too soon to see the long-term effects. GM came out of Chapter 11 reorganization (with help from government funds) with an initial public offering that was the highest in history, at $20.1 billion. Some contestants on Wheel of Fortune probably wish they could bounce back from a "Bankrupt" like that.

6. Marvel Entertainment

We don't want to get into a debate over the superiority of Marvel over DC (or vice versa), but there's no denying that Marvel has been one of the top comic book companies for the past couple of decades. The parent company of Marvel Comics, and thus some of your favorite character like Spider-Man, the X-Men, and Captain America, has needed its own hero in its business history. Facing money problems and unable to come to a bailout deal with bondholders, Marvel filed for bankruptcy in 1996. The resulting drama with shareholders could've filled a (very boring) comic book, which would've ended with the merger of Marvel Entertainment and ToyBiz to create Marvel Enterprises.

7. Hugo Boss

Men's fashion leader Hugo Boss' story is kind of backwards compared to the rest of these. While the master tailor was creating great clothes before his bankruptcy, his company is now a giant in the good-looking men industry. Hugo Boss himself started the company in 1924 in a small town in Germany, but because the economy was so tough after World War I, he had to declare bankruptcy after just six years. But in 1931, he picked back up and began building an empire. Today, the company does business in 110 countries with several fashion lines for both men and women.

8. Atkins Nutritionals

Remember that dark time in recent history when people were going around eating nothing but big slabs of meat? Sure, eating few-to-zero carbs helped fat people lose weight, but it also made them look like crazed savages. The company that was encouraging this behavior was Atkins Nutritionals, the biggest name in the no-carb diet fad. Besides the books on the diet, the company also sold low-carb food products to go along with them. Of course, just like with most fad diets, the interest in the Atkins way of eating died down, and in 2005, the company filed for bankruptcy.

9. Lehman Brothers

As the fourth biggest investment bank in the country, you could say Lehman Brothers was pretty important. It was also using some accounting tricks to make it seem more stable than it was, and was eventually brought down by the mortgage crisis. With $613 billion in bank debt and $155 billion in bond debt, Lehman Brothers' filing for bankruptcy in 2008 became the largest bankruptcy in U.S. history.

10. Reader's Digest Association

At some point in your life, you've come across a Reader's Digest magazine, whether it was at a doctor's office or in the pile of reading materials in your grandpa's bathroom. Considering it was first distributed in 1922, it's no surprise that the average reader is, well, really old. And with the trouble print publications have been running into in the last decade, this old-fashioned publication just couldn't pull its weight anymore. Reader's Digest Association has other magazines, but they couldn't escape bankruptcy in 2009.

[Source: Business Insurance. Images added.]