Technically speaking businesses are always in one of the phases of business cycle; slump, recession, recovery, and boom. And, if business is nowhere in these phases, it has probably completely phased out i.e. gone bankrupt. Many famous business houses have lost their glory in the past, and even though they remain exemplary, their contemporary value is only in history books. Given below is a list of the top 10 famous companies that went bankrupt. Read more to learn some interesting facts that lead to their demise.
10. Delphi, 2005:
Delphi is believed to have been created as a spin off to GM. It was one of the largest auto parts manufacturers in USA, but eventually it was discovered to have been a ploy deliberately set up so that a large number of layoffs could be carried out without anyone suspecting the role of GM.
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9. Trump Entertainment Resort, 2004, 2009:
Trump Entertainment Resort, the great gambling resort, got its first blow of going bankrupt in the year 2004, but it managed to somehow revive back within just one year. Later, when the economic slump hit the economy of USA, and gambling once again got a big jolt, the company was in tatters. When it filed for bankruptcy in 2009, its debts stood at around $1.74 billion.
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8. Delta Airlines, 2005:
Once upon a time Delta Airlines was among the best and most profitable airlines in America but the rising fuel prices and stiff competition from low cost airlines proved fatal to the airlines. This clubbed with the non availability of concessions and higher labor costs led to the company filing for bankruptcy in 2005. But, this scene was soon swapped and in 2007 Delta Airlines again made a comeback.
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7. IndyMac Bancorp, 2008:
IndyMac was once the most innovative of mortgage lenders that innovated and allowed borrowers to borrow without providing full documents about the assets or income. The concept became very popular but eventually the number of defaulters grew rapidly to ultimately leading the company to a final collapse. At the time of filing for bankruptcy, the total assets of the company stood at $ 32.7 billion and the debt stood somewhere between $200 and $500 billion.
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6. Refco Inc, 2005:
New York based corporation Refco was one of the famous companies in the financial sector. It provided a diversified portfolio of financial services and was operating in around 14 other countries. After it was established in 1969, it had eventually become the largest broker on the Chicago Mercantile Exchange and had more than $4 billion customer accounts. Ultimately the company accrued a total debt of $430 million, for which Philip Bennett, CEO and Chairman, pleaded guilty.
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5. Enron, 2001:
USA’s recent biggest bankruptcy case ever was that of Enron. The Company was established in 1985, grew in leaps and bounds, and became the 7th largest company of in terms of revenue. It bought electricity from generators and sold it to customers for earning the humungous profits it did. In order to keep getting credit, it kept away $500 million in debt, which was kept off the book, but once the amount exceeded $638 million, the Securities and Exchange Commission opened an investigation. The rest is history.
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4. Pacific Gas and Electric Co. 2001:
Established in 1905, the Pacific Gas and Electric Co. was a profit making corporation until the deregulation of electricity began. It had to sell off its natural gas plants and only retained the hydroelectricity plants. With all this the electricity generating capacity of the company declined, eventually leading to bankruptcy.
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3. WorldCom Inc, 2002:
WorldCom Inc, once the largest US based Telecommunications Company, went bankrupt after its revelation of $4 billion expenses, wrongly. It had more than 20 million customers, and 80,000 employees. At the time of bankruptcy, it was considered as one of the largest and very famous companies in USA, with a value of $100 billion.
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2. General Motors, 2009
General Motors based in Detroit, was one of the biggest car manufacturing company’s of the world. With operations in more than 157 countries, and more than 209,000 employees, the company eventually experienced a drastic decline in car sales, and was lead to file bankruptcy in 2009. After receiving good government financial aid, the company came back on track with the horror of bankruptcy behind it.
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1. Lehman Brothers, 2008:
Lehman Brothers, the company with a value of $600 billion and one of the world’s largest financial corporations, filed for bankruptcy in 2008. The news sent shock waves around the world, and within no time, the company shares dropped by a whopping 94 percent which headlined the 2008 global financial crisis. It is now a liquidating company.
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