blog home Bankruptcy & Debt Relief Hostess, Kodak Show Why Los Angeles Corporate Bankruptcy Is Beneficial

Hostess, Kodak Show Why Los Angeles Corporate Bankruptcy Is Beneficial

By Encino Bankruptcy Attorney on January 23, 2012

Historic Eastman Kodak and Twinkie-maker Hostess are two companies that recently filed for corporate bankruptcy protection‚ which has shocked people not familiar with the bankruptcy process and set off campaigns to help the companies.

Los Angeles bankruptcy lawyers recognize that corporate bankruptcy in Los Angeles is highly beneficial to companies who want to have a better future.

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In most cases‚ filing for bankruptcy simply means the company wants to improve their future. It’s the same for consumers. No one files for bankruptcy because they are uninterested in improving their financial outlook.

We reported on our Los Angeles Bankruptcy Lawyer last year that multi-billionaire Donald Trump has filed for bankruptcy four times through his various companies.

Most people wouldn’t consider Trump a failure at business because he has ridiculously large corporations and makes millions of dollars a year. Yet‚ he filed bankruptcy not because he wanted to see his companies flounder‚ but because he recognized the benefits to using bankruptcy protection laws for his businesses. The same is happening for Kodak and Hostess.

The Wall Street Journal reported recently that Eastman Kodak filed for bankruptcy with a goal of cutting back on what it owes retirees and forcing large technology companies to pay to use its patents. The newspaper reports that the company is hoping to shed its photography side of the business — on which the company was built in 1889.

In the other case‚ Hostess‚ the sweet treat company that makes the iconic Twinkies‚ has filed for Chapter 11 bankruptcy protection. The company filed for bankruptcy three years ago and was able to restructure.

It is doing it again because it has $860 million in debt‚ mostly due to expenses tied to its labor force‚ The New York Times reports. The company has 100‚000 or more creditors and many of them are labor unions and pension funds representing its workers. By filing for bankruptcy‚ the company may be able to lose some of its debt obligations and shrink its workforce while still pumping out the sweet treats that many Americans buy.

The bottom line here is that both of these companies see the benefits of corporate bankruptcy. It is a sign that both companies have plans to continue thriving‚ but need a little help. Getting lenders to continue allowing a company to borrow money can be a problem when debt creeps up.

Filing for bankruptcy allows the debt that is causing a company to struggle to be dismissed while getting creditors off the back of corporate officials. And if creditors are kept at bay‚ that can allow the business to get back on track.

While the issues are different for these two iconic companies‚ their problems are similar. They need to shed debt to improve creditor rating and the availability of creditors. Without this improvement‚ they will flounder. Bankruptcy provides the way to improve the future of the company.

Nader‚ Naraghi & Woodcock‚ APLC will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and San Fernando Valley‚ just call (800) 568-0707.

Additional Resources:

Can Bankruptcy Filing Save Kodak‚ by Mike Spector‚ Dana Mattioli and Peg Brickley The Wall Street Journal

Hostess‚ Maker of Twinkies‚ Files for Bankruptcy‚ by Ben Protess‚ The New York Times


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