You Ain't Got No Money In the Bank Quiz

Answer: Ford Motor Co

Of the American "Big Three" automakers only Ford Motor Co. has not filed for bankruptcy protection at any time since its incorporation in 1903. Ford contemplated filing bankruptcy in 2008-09 and recorded a staggering loss of over 14 billion dollars for fiscal year 2008. Ford however chose to support its operations by using internal equity and by the end of 2009 could report a profit. Delorean Motor Co was the maker of the car made famous in "Back To The Future". The Delorean was a much hyped but flawed experiment by former GM executive John Delorean. Delorean Motor Co. filed for bankruptcy and closed operations in 1982.

GM and Chrysler, on the other hand, both filed for bankruptcy protection in 2009. GM was reorganized with the help of a 50 billion dollar investment from the US government. GM later repaid 39 billion to the US government and reacquired its stock. Chrysler was also reorganized with the Italian-owned Fiat Spa assuming a twenty percent stake and the US government infusing 6.6 billion dollars and receiving a nine percent ownership share. By 2014, Fiat had purchased all the outstanding shares of the "new" Chrysler, and a new entity Fiat Chrysler Automobiles owns both automakers. The 2009 bankruptcy was not Chrysler's the first trip to the government bailout trough, as the US government had previously staved off a Chrysler collapse with a 1.5 billion dollar contribution in 1980.

Answer: Worldcom

The confusing world of voice and data communication exploded in 2002 when Worldcom Inc, then the second largest international telecommunications company, filed one of the largest bankruptcies in history. Worldcom started out as Long Distance Discount Services, Inc. (LDDS) in 1983, providing long distance telephone services in the wake of the deregulation of the communications industry and the breakup of AT&T. Over the next 15 years, LDDS grew into a giant company. In 1997, LDDS merged with MCI Communications in a massive 38 billion dollar deal that formed the world's second largest telecommunications company. Now called Worldcom the company tried to acquire competitor Sprint in 2001, but was denied the ability by antitrust regulators in the US and EU out of fear of creating a new monopoly.

The ending of the 20th century also saw the heretofore unprecedented rise in high tech/telecommunications company's stock prices. The almost overnight burst of the so-called "dot.com bubble" reduced demand for Worldcom's services and rapidly decreased its stock value. To cover failing revenues and dubious investments, Worldcom committed over 11 billion dollars in fraud and illegal accounting practices. The ensuing scandal further devalued the company, and Worldcom filed for bankruptcy in July 2002. Assets of the former telecommunications giant were sold in 2005 to Verizon Communications, Inc.

Answer: Pacific Gas & Electric

The intersection of a company that cannot raise prices but faces rising supply costs is usually a trip to large losses and a date with a bankruptcy judge. In California, a public commission sets the rates that utilities may charge customers for electricity. However generators of electricity for sale to utilities (often the excess electricity of other service providers) can be sold for profit at the market price. Pacific Gas & Electric (PG&E) provides energy to much of San Francisco and the Bay Area of Northern California.

In 2001, a reduction in its internal sources of electricity caused by a sustained drought that reduced hydroelectric power required PG&E to purchase more expensive energy on the market. The California Public Utility Commission denied PG&E's attempt to offset rising prices with consumer price increases. As a result, PG&E lost billions of dollars. The company was unable to secure concessions from the state government to either raise prices or obtain a bailout and thereafter filed for bankruptcy in April 2001. Ultimately a deal was reached to reduce the company's debt and allow it to increase prices, thus keeping the lights on for California consumers. The entire debacle cost the taxpayers of California billions in tax funds and increased their electricity costs as a reward.

Answer: Kmart

Kmart was founded in 1899 by Sebastian Kresge, who followed the model laid out by fellow department store pioneer Frank Woolworth. Kmart, Walmart, and Target dominated the American landscape for discount department stores during the post-World War II period of US expansion and prosperity. In 1961, Kmart introduced the "blue light special". The specials were surprise in-store discounts that were preceded by a flashing blue light and an employee announcing "attention Kmart shoppers there is a special on..."

Kmart lost ground to its competitors during the 1990s principally because of an outdated supply model and reluctance to adapt to changing in tastes of the shopping public. In the late 1990s, Kmart began contracting and was forced by creditors to file for bankruptcy in January 2002. Kmart emerged from bankruptcy with 300 fewer stores but a significantly reduced debt. Kmart purchased the once venerable but now damaged Sears Roebuck Co. in 2004. The combined company has continued to struggle and shrink in the wave of an overall move away from "big box" department stores towards on-line retailers such as Amazon.

Answer: Donald Trump

Donald Trump was born to a wealthy family and in his own right made and lost several fortunes, all the while maintaining a high profile lifestyle. Until becoming President, he was perhaps most famous for his role as the host and future employer of the American television reality game show "The Apprentice". On "The Apprentice" the prize for "winning" was employment in one of Trump's business ventures. When he eliminated a contestant Trump would punctuate the decision by bellowing "you're fired!"

Trump Entertainment Resorts, Inc. runs the casino gaming end of Trump's investments. However, despite holding the "house advantage" the casino operation has declared bankruptcy four times between 1991- 2014. Investors in Trump gaming ventures have not fared as well as Donald himself who is estimated to retain a personal fortune of 4-7 billion dollars.

Answer: Fruit of the Loom

Undergarment manufacturer Fruit of the Loom began operations in 1851 when the daughter of textile mill owner Robert Knight began adding apple designs to cloth. Knight felt that the name "Fruit of the Loom" sounded like "fruit of the womb". He was amongst the first people to receive a trademark for his company logo. The logo features apples, currants, green and red grapes and leaves. Actors dressed as the "fruit" have been a staple of the company's print and television advertising for decades. Famously, Academy Award best actor winner F. Murray Abraham appeared as the leaves in several Fruit of the Loom commercials before achieving success on Broadway and films.

During the 1990s Fruit of the Loom made a series of bad investments and poor brand expansions efforts. A massive debt load and increased competition from Hanes and specialty undergarment companies forced Fruit of the Loom to file for bankruptcy in 1999. The company was purchased by Warren Buffet's Berkshire Hathaway in 2002 and has rebounded to a leadership position in the undergarment market.

Answer: Southwest Airlines

The airline industry is fraught with failed enterprises. Once iconic names such as Pan Am, TWA and Eastern Airlines disappeared under a flood of losses and debt. Why airlines fail so frequently, is primarily a function of increases in fuel and labor costs, competition on profitable routes and brutal price wars created in the wake of the deregulation of airline fares. Even winners in the airline wars such as United, Delta, and US Air have had to reorganize in bankruptcy to survive. United sought bankruptcy protection in 2002, Delta in 2005 and Us Air twice in 2002 and 2004.

Surprisingly, Southwest Airlines has never filed for bankruptcy. Southwest began operations in 1967 flying routes only in Texas. The airline used low fares, secondary airports and the sex appeal of its flight attendants to create a distinct marketing presence in the airline industry. Southwest has grown from a single airplane in 1967 to a fleet of over 630 airplanes, earning over 17 billion dollars in annual revenue and employing 45,000 people.

Answer: Chiquita Brands International

Chiquita Brands International (formerly the United Fruit Co.) is closely associated with both the development of the banana as a major crop and the politics of Central America. Chiquita began as a side business for American railroad builder Minor C Keith, ancillary to the construction of a railway in Costa Rica. Bananas were planted alongside the tracks to both serve as food for workers and to mark the tracks. When the Costa Rican government defaulted on rail payments massive amounts of land were ceded to the American companies. While the railroad proved unprofitable for the American investors, the sale of bananas more than made up for the losses. In 1899, Keith merged his banana business with the Boston Fruit Co and the combined company was renamed the United Fruit Co.

United Fruit created the Chiquita brand in the 1940s, and the company name was changed in 1984. During much of the 20th Century, Chiquita, and its rival the Standard Fruit Co (later Dole Foods), controlled major portions of land and owned rail, telephone and telegraph lines serving many of the Central American and Caribbean countries. The servile nature of local governments caused American writer O Henry to coin the phrase "Banana Republic" to refer derogatorily to the influence wielded by Chiquita and Dole. However by the late 1990s increased production in bananas caused a worldwide glut of the fruit and dropped prices and correspondingly Chiquita's profits. Chiquita filed for bankruptcy protection in 2001, but emerged in 2002 and has returned to consistent profitability.

Answer: Bethlehem Steel

Throughout the late 19th and 20th centuries, the engine of American industrial expansion was served by a robust and dominating steel industry. The largest of these companies were US Steel and Bethlehem Steel. Bethlehem Steel was founded in 1857 and originally served to provide steel for American railroads. After losing much of the rail business to Andrew Carnegie and J.P. Morgan's US Steel, Bethlehem Steel concentrated on shipbuilding and structural steel for buildings and bridges. Much of the steel used to build ships for the US Navy during the first half of the 20th Century came from Bethlehem's forges. Similarly, the steel for the Golden Gate Bridge came from Bethlehem.

By the 1970s, Bethlehem Steel and its US counterparts started to face increased competition from less expensive foreign producers. Higher US wages and increased focus on environmental regulation, essentially made American steel unprofitable. At the same time, many blame the arrogance of the steel companies in not modernizing their plants or adapting to new technology for their demise. Throughout the 1980s and 1990s Bethlehem shutdown mills and mining operations. By 2001, the company was bankrupt and shut down all operations. The remaining assets of the company were sold off in 2003.

Answer: Bank of America

Technically banks in the US do not file for bankruptcy as the regulatory scheme followed by the US since the Great Depression, but rather a "failed" bank is taken over by either state or federal regulators. Most deposits in a bank are insured against a failure by the US Treasury through the Federal Deposit Insurance Co (FDIC). As a matter of the colloquial nomenclature, a bank failure is the same as a business being either reorganized or liquidated through bankruptcy.

That being said, the severe devaluation of US home values in the mid -2000s lead to a record number of defaults on home loans and precipitated a wave of bank failures unseen since the Great Depression. The 2008 failures of Lehman Brothers and Washington Mutual (called WaMu) were two of the largest bankruptcies ever seen. These companies lost billions from poor mortgage investments and suspect accounting practices. The ensuing US recession brought fear of a new global depression that was averted by a massive intervention by the US Treasury. CIT Group, Inc. (not to be confused with the Citi Group that owns Citi Bank) was also a large investor in subprime home mortgages, that narrowly avoided liquidation and successfully reorganized after filing for bankruptcy in 2008.

Bank of America is the largest bank in the US. Despite its dubious loan practices, BofA grew significantly during the 2008-09 banking crisis by acquiring troubled competitors, such as home mortgage lender Countrywide Financial and the venerable investment company Merrill Lynch.