Well-Known Companies at Risk
Bleak and Bleaker
By: Pat Hunter
Foreclosures are up 30 percent in the month of February and unemployment rates continue to spiral with double rates in some states. As the economy worsens, more well-known companies are at risk of failing. There are some well known companies on the U.S. News list of failing companies, which include Rite Aid, Eastman Kodak and Krispy Kreme.
According to U.S. News & World Report, “Moody's, the ratings agency, recently published a list of "bottom rung" companies most likely to default on their debt. The criteria are technical, but the upshot is that a lot of companies are in deep trouble - and the list is getting longer, not shorter. Moody's predicts that the default rate on corporate bonds this year will be three times higher than in 2008, and 15 times higher than in 2007. Defaults are often the last step before a bankruptcy filing. And bankrupt companies, obviously, don't usually hire people.”
“Companies in the most acute danger are those with reduced cash flow and a high debt load. A lot of big, well-known companies are in danger. On the list: Advanced Micro Devices; AirTran; AMR (parent of American Airlines); Chrysler; Duane Reade; Eastman-Kodak; Ford; General Motors; JetBlue; Krispy Kreme; Palm; R.H. Donnelly; Reader's Digest Association; Rite-Aid; UAL (parent of United Airlines); Unisys; and US Airways.”
The Atlanta Constitution reported that shares of Six Flags fell Friday “on growing speculation that the theme park operator may be forced to file for Chapter 11 bankruptcy protection after the company said it could not meet a looming financing obligation.” Six Flags owns and operates over 20 theme parks throughout the U.S., Latin America and Europe.
SOURCE: U.S. News & World Report