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Globix: Chapter 11

2002-03-05 21:57:52+00 by Dan Lyke 4 comments

Fucked Company reports Globix has gone Chapter 11. Worth a pull-quote is this line from the memo:

The act of filing our plan is another step forward, one which has been long awaited, toward establishing our long-term financial stability.

Okay. You're part of this upper management team. Doing the road-show, trying to convince institutional investors that taking this company public is something that they can invest in. You say "long term we plan on spending wastefully, then declaring Chapter 11 so we can screw over our payables...". No wonder Berkshire-Hathaway declined to invest.

[ related topics: New Economy ]

comments in ascending chronological order (reverse):

#Comment made: 2002-03-06 11:50:27+00 by: meuon

I know that many of these companies REAL business plan included going Chapter 11, and "restructuring debt" in order to continue operations. It's a loophole in our legal system that is being abused a lot. Should we allow it to continue?!?! Not when the people leading a company down this path are receiving obcene salaries and bonuses to lead the parade into the sewer. "Sustainable Development" has traditionally been used to describe eco-smart industry development. I think it's time to think in terms of business practices.

#Comment made: 2002-03-06 16:21:18+00 by: Dan Lyke

Nice use of the pseudointerrobang.

I'd love to find a way to bring more personal responsibility into upper management, but unfortunately I think that's a matter of changing the way large institutional investors view the market, and I don't see that happening any time soon.

#Comment made: 2002-03-06 20:28:31+00 by: flushy

Reminds me of a rumor I heard... Chemical Plant CEO turned dot-com entrepreneur was having thoughts of Chapter 11 or 7. Which in turns puts ex-owner of said dot-com at some serious financial responsibility since it was sold via auction while under Chapter 11. He will be the happy owner of all the debt again.

Skipping through life can sometimes give you flat tyres...

#Comment made: 2002-03-06 21:24:01+00 by: petronius

Some years ago I read in Business Week some excerpts from official stock tender documents filed with the SEC. Apparently lying on one of these is a far worse rap than merely losing all the money and beggaring numerous widows and orphants. One mentioned that in their new venture they were relying heavily on the advice of Mr. so-&-so who was currently finishing off a stretch in a Federal jail for fraud. I wonder who invested in this one. Of course, this was before the dawn of the Dot-com bubble, so these guys may still be around....