Tag Archives: bankruptcies

49% rise in companies seeking Chapter 11

Red-Lobster

Important Takeaways:

  • At least 10 restaurant chains, not including multi-unit franchisees, have filed for bankruptcy in 2024. August alone brought three Chapter 11 filings from notable eateries. The increase in bankruptcies comes as diners pull back their spending, labor costs keep rising and Covid-era government help disappears.
  • Restaurants are not the only companies seeking bankruptcy protection as high interest rates weigh on businesses. Chapter 11 filings have climbed 49% this year as of Aug. 20, according to BankruptcyWatch. Mall retailer Express, nursing home chain LaVie Care Centers and Joann Fabrics and Crafts are among the companies that have filed for bankruptcy protection this year.
  • Here are the 10 notable restaurant chains that filed for bankruptcy protection in 2024:
    • Roti
    • Buca di Beppo
    • World of Beer
    • Rubio’s
    • Melt Bar & Grilled
    • Kuma’s Corner
    • Red Lobster
    • Tijuana Flats
    • Sticky’s Finger Joint
    • Boxer Ramen

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Donald Trump warns “A Great Depression is Coming”

Donald-Trump-Public-Domain-Whitehouse.gov-Photo

Important Takeaways:

  • Do you believe Donald Trump? He is entirely convinced that if we stay on the path that we are currently on we are heading into a “great depression”, and many believe that he is right on target.  Unemployment is rising, manufacturing activity is contracting, bankruptcies are soaring, home sales have fallen to depressingly low levels, the cost-of-living crisis never seems to end, poverty is soaring and homelessness is at the highest level ever recorded.  Since Barack Obama first entered the White House, our politicians in Washington have been propping up the economy by adding 25 trillion dollars to the national debt.  Now our national debt has crossed the 35 trillion-dollar mark, and our politicians continue to spend money at a pace that is absolutely absurd.  But despite this tremendous influx of borrowed cash, the wheels are starting to come off the U.S. economy anyway.
  • This week, everyone is talking about a “recession” because of what has been happening in the financial markets.
  • Prior to Tuesday’s session, more than 6 trillion dollars in global stock market wealth had already been wiped out…
  • Bloomberg estimates that approximately $6.4 trillion has been erased from the value of global stock markets over the past three weeks.
  • Last Friday, the Sahm rule was triggered when the unemployment rate went up again…
    • The Sahm rule, created by the former Federal Reserve official Claudia Sahm, triggers when the unemployment rate’s three-month moving average moves 50 basis points above its 12-month low.
    • That rule was triggered Friday, with the moving average rising 53 basis points above that one-year trough, according to the real-time Sahm Rule Recession Indicator from the St. Louis Federal Reserve.
  • The Sahm rule has successfully predicted every single recession since 1970, and it is indicating that another recession is here.
  • Today, we learned that Dell is planning another round of mass layoffs…
    • While Dell has confirmed the layoffs, it hasn’t revealed how many employees are losing their jobs. SiliconAngle reports that roughly 12,500 Dell employees are being laid off this week, citing an unnamed source. Impacted employees are primarily on Dell’s sales and marketing teams. A layoff tracker has since reported the same number.
    • Former Dell employee Ian Armstrong, who previously worked on the company’s UX design team for eight years, called the layoffs a “bloodbath” in a post, reporting that Dell has now laid off 24,500 staff in the past 15 months.
  • Meanwhile, the cost-of-living crisis continues to crush working families all over the nation.
  • At this point, it takes an additional thousand dollars a month for the typical U.S. household to buy the exact same goods and services that it did three years ago…
    • The typical U.S. household needed to pay $227 more a month in March to purchase the same goods and services it did one year ago because of still-high inflation, according to calculations from Moody’s Analytics chief economist Mark Zandi shared with FOX Business.
    • Americans are paying on average $784 more each month compared with the same time two years ago and $1,069 more compared with three years ago, before the inflation crisis began.
  • That is one of the primary reasons why credit card debt is at an all-time high and credit card delinquencies are soaring into the stratosphere…
  • As I discussed a few days ago, we are witnessing a very alarming surge in business bankruptcies…
    • Over the past year, business bankruptcy filings are up 40.3 percent, and have now reached a number not seen since the second quarter of 2020, at the peak of lockdowns. American households are following along, with total bankruptcy filings up 16.2 percent in the past year, including 132,710 new filings in the second quarter of 2024 alone.
  • A 40 percent increase in one year is quite serious.

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Home Depot CEO warns Bankruptcies won’t be like what we’ve seen in past

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Former Home Depot CEO issues grim warning over US bankruptcies: ‘It’s different than anything I’ve seen’
  • Former Home Depot CEO Bob Nardelli issued a grim warning over the U.S.’s “very complex” economy, cautioning consumers that middle market companies are under “tremendous pressure.”
  • “I think we’re going to see a lot of bankruptcies. Like Bed, Bath and Beyond. We got Walmart not only laying people off, but closing stores. We got Accenture laying people off. We got Amazon closing distribution centers. So I think there’s a tremendous-mixed message,” Nardelli said during an appearance on “Cavuto: Coast to Coast.”
  • The former CEO continued, saying that the “complexity” of the U.S. economy is “different than anything I have seen in my 52 years.”

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German tourist industry warns of job losses from tighter pandemic lockdowns

(Reuters) – The German tourist industry has warned of layoffs and bankruptcies if authorities further tighten lockdowns meant to curb the spread of the coronavirus including by enforcing quarantine for those returning from holidays abroad.

National and regional leaders meeting on Monday evening to decide the next round of measures to tackle the coronavirus pandemic are mulling requiring quarantine for all returning travelers, not just those who were in high-risk areas.

“From the point of view of the tourism industry, it is unacceptable and absolutely disproportionate to quarantine, irrespective of the incidence rate at the destination,” said Michael Frenzel, president of the BTW tourism association, adding that travelers already have to test for the virus.

Two other tourism industry associations, DRV and BDL, said that further restricting international travel could cost jobs for the sector’s 2,300 tour operators and 10,000 travel agencies.

State aid has so far only compensated for a fraction of the costs the industry has suffered as a result of the pandemic, they said.

Earlier in March, Germany removed regions in Spain, including the tourist island of Mallorca, and Portugal from its list of coronavirus risk areas. The decision pushed tens of thousands of Germans to plan last-minute Easter getaways to Spain’s Balearic islands.

Germany is set to extend a lockdown into its fifth month through April 18, according to a draft proposal, as infection rates exceeded the level at which authorities say hospitals will be overstretched.

(Reporting by Klaus Lauer; writing by Bartosz Dabrowski in Gdansk; Editing by Bernadette Baum)

Texas utility sues power grid ERCOT over ‘excessive’ cold snap charges

By Gary McWilliams

(Reuters) – The largest city-owned utility in Texas on Friday sued the state’s grid operator alleging it levied “excessive” power prices during a February deep freeze, and seeking to bar the grid from issuing a default that could affect its credit rating.

High prices for emergency fuel and power during a severe cold spell left Texas utilities facing about $47 billion in one-time costs. Those costs have led to two bankruptcies and knocked two other electric providers off the state’s power grid because of payment defaults.

San Antonio’s municipal utility, CPS Energy, faces about $1 billion in extraordinary charges for natural gas and electricity during a five day deep freeze last month. CPS Energy has about 820,000 electricity customers.

“We are fighting to protect our customers from the financial impacts of the systemic failure of the state’s grid operator,” said Paula Gold-Williams, chief executive of the city-owned utility.

The lawsuit, filed in a Bexar County court, alleges grid operator Electric Reliability Council of Texas (ERCOT) mismanaged the cold weather crisis, and overcharged for power. It asked the court to prevent ERCOT from declaring it in default and to prevent ERCOT from charging CPS Energy for other grid defaults.

An ERCOT spokeswoman did not immediately reply to a request for comment. Nearly $3.1 billion in power charges to grid users have not been paid so far, ERCOT said on Thursday.

ERCOT officials hiked power prices by about 400 times the usual rate to $9,000 per megawatt for five days last month in a vain effort to bring in more power. State officials this week called on ERCOT and the utility regulator to cut those charges for high-price power for the 32-hour period after the grid emergency passed.

CPS Energy’s lawsuit called ERCOT’s handling of the crisis “one of the largest illegal wealth transfers in the history of Texas.” It brought the complaint “to protect its customers from excessive and illegitimate power and natural gas costs,” according to the lawsuit.

Credit rating firms have warned CPS and other Texas municipal and rural cooperative power provider could have their ratings lowered. The state’s largest and old cooperative, Brazos Electric Power Cooperative Inc, filed for bankruptcy earlier this month owing $1.8 billion to ERCOT.

(Reporting by Gary McWilliams; Editing by Marguerita Choy)