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JC Penney, American Airlines could vanish next year

With New Year’s upon us, there are many businesses — small and big, thriving and struggling — that will be asking many questions about their fiscal situation. The financial health of any organization is paramount to almost any other issue.

Chapter 11 bankruptcy could actually be considered a “healthy” option for some businesses. Chapter 11 can allow insolvent companies to pay back their debt under different conditions than what their creditors originally imposed. This revised deal can reduce the amount paid for regular installments and extend the length of time an organization has to pay back the debt. By freeing up the finances, a company in Chapter 11 can look to improve their outlook in 2013.

Some companies, however, are facing a very difficult 2013. Here are a few that many business analysts believe are headed the way of the dodo:

  • JC Penney: Yes, the century-old retailer which recently underwent a massive overhaul of its operations is in a lot of trouble. Sales are down 20 percent year-over-year, and online sales have dropped a staggering 33 percent.
  • Research in Motion: Known for the Blackberry brand that was once the king of the cell phone industry, RIM is now on the verge of extinction. The company could be acquired by another tech giant, but the name will likely go away in such a scenario.
  • American Airlines: Synonymous with the best airline in America, AA has been a victim of mergers by other airlines rather than its own ineptitude. Northwest and Delta merged a few years ago, with United and Continental following shortly after that. As a result, AA is now a marginalized, mid-size airline struggling to make it by.

Source: Yahoo!, “Brands That Will Likely Disappear in 2013,” Farnoosh Torabi, Dec. 27, 2012

  • To learn more about the viability of a Chapter 11 filing for your business, please visit our Los Angeles Chapter 11 page.

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