17 October 2008

Corporate bankruptcy and the little guy

Here's the text of a letter written by a businessman in Whitney, Texas, to a bankruptcy judge in Kansas City. MO, in October 2006.

The reference is to the Interstate Bakeries Corp., which had filed for chapter 11 protection two years before. The IBC, which is the company behind such famous brands as Twinkees and Wonder Bread, failed to adapt in time to the low-carb diet craze and went under.

The letter gives an idea of how that affects ordinary folk. After all, a corporate entity on IBC's scale is general one of several inter-related corporations, a family in which it isn't clear to outsider who is a subsidiary of whom.

"My name is ***** *****. I am the landlord for Dolly Madison Bakeries located at 584 S. -------- Rd., ------, Texas....

"The Attorneys for Interstate Bakeries are asking you to disallow my claim in the amount of $5,230.75 due to IBC being the improper Corporation.

"I was told in 2004 to request payment from IBC and did so. Interestate Bakeries made payment in the amount of $1,993.61 (copy of check attached) which was for the 2004 taxes prior to the filing of bankruptcy. The total amount of the taxes for that year was $7,224.36. They still owe $5,230.75. Their lease states that they are to pay their pro-rata share of the property taxes each year.

"I respectfully request Interstate Bakeries Corporation debt to me not be demolished."


I was looking to develop some story ideas recently, rummaging (in a cyberspatial sense) through the years-old file for interesting legal issues. Not much luck.

But I did find the above letter, which I consider very poignant and in its own sociological way, fascinating.

The usual mental habit is to think of the landlord as the 'upper hand,' the tenant as the one fearing, and often experiencing, oppressionor ill treatment.

But here the landlord is one guy, a natural person not a corporation. And not enough of a big shot to have a lawyer write a letter for him. He writes it himself. Not even a lawyer friend who can give him a once-over and some free advice. Or that strange use of the word "demolished" wouldn't have made the cut.

I hope he ends up with something out of the re-organized entity. Some stock in the new version of IBC when it emerges from the court's protection, perhaps. Let's root for that.


Anonymous said...

Hi, I do think this is a great web site. I stumbledupon it ;) I am going to revisit yet again since I book-marked it.
Money and freedom is the best way to change, may you be rich and continue to guide others.

Feel free to surf to my page - professional appliance repair Valrico

Anonymous said...

Every weekend i used to pay a quick visit
this site, as i wish for enjoyment, for the reason that this this site conations actually pleasant funny data too.

Visit my web blog loan refinance va

Anonymous said...

I leave a response whenever I appreciate a article
on a website or I have something to contribute to the discussion.
It is triggered by the passion displayed in the post I read.
And on this article "Corporate bankruptcy and the little guy".
I was actually excited enough to post a comment :-) I actually do have a couple of questions
for you if it's allright. Is it simply me or do a few of the remarks appear as if they are left by brain dead people? :-P And, if you are posting on additional online sites, I would like to follow anything fresh you have to post. Would you make a list the complete urls of all your social sites like your Facebook page, twitter feed, or linkedin profile?

Feel free to visit my webpage Bench Craft Company advertising ideas for facebook

Rafsan Rana said...

Thanks for sharing. Bankruptcy is a provision of federal law that helps to protect an individual from the burden of overwhelming debt. When income is no longer sufficient for a person to make scheduled payments, such as mortgage, medical bills or credit cards, filing bankruptcy may allow you to renegotiate or discharge some of this debt to make it more manageable.Corporate Bankruptcy

Knowledge is warranted belief -- it is the body of belief that we build up because, while living in this world, we've developed good reasons for believing it. What we know, then, is what works -- and it is, necessarily, what has worked for us, each of us individually, as a first approximation. For my other blog, on the struggles for control in the corporate suites, see www.proxypartisans.blogspot.com.