Many do not think of bankruptcy as something that is beautiful, but like many things, it all depends on how you look at it. Most would appear to view bankruptcy as nothing more than death of a company, and as such, see a conclusion of darkness and despair without hope. Certainly for the one declaring bankruptcy, it is an unpleasant experience, but there is hope for employees and consumers alike when a company declares bankruptcy. “Hope in death,” you ask? Of course, for there would be no resurrection without first having the death.
A perfect example of the beauty of bankruptcy can be found in the case of the Archway Cookie Company, which filed for Chapter 11 bankruptcy in October of this year. Two plants were closed, and employees found the prospects of financial turmoil to be more than a little disheartening. In a situation like this, all hope must be lost, and there is obviously no chance of Archway Cookies returning from the black abyss, right? Wrong.
North Carolina based Lance, Inc. purchased the assets and brand of Archway Cookies at auction for $30 million in December. Lance has already reopened one of the factories and has re-hired about 60 former Archway employees at their previous salaries. All current employees that Lance has re-hired, and the other former Archway employees that have yet to be re-hired, were given $1,500 Visa gift cards to help with bills and Christmas. Their plan is to steadily hire the rest of the former Archway employees as business grows and increased production goals need to be met. Lance, Inc. which already has a successful corporate business model, will likely create a more stable employment situation for all their employees, unlike the former leaders at Archway who received their just deserts from the free market. This situation is a perfect example of the beauty of bankruptcy.
The fear mongers of bankruptcy and the enemies of laissez-faire capitalism would have the public believe that if the U.S. auto industry goes under, it will cease to exist, and the grass will grow tall around decrepit facilities and factories riddled with graffiti. Nothing could be further from the truth however. Like Archway above, auto manufactures that declare bankruptcy will be bought out at rock bottom prices, restructuring will occur, and proper stewardship is likely to be exercised to produce a successful company that does not need to be sustained by tax dollars. This is the beauty of bankruptcy.
