At the start of 2012,
Fitch Ratings forecast the amount and size of
U.S. corporate bankruptcies
would double. If there is any good news on this front, it is that
for the 12 months ending September 30,
Chapter 7 and Chapter 11 corporate filings
, though Chapter 13 filings modestly rose.
Still, there have been some noteworthy companies to travel
Bankruptcy Boulevard, most recently Twinkies maker Hostess joined
that group. Companies come and companies go. That is the nature
of capitalism. With that in mind, what follows is a list of
familiar companies that may not make it through 2013.
The caveat here, and it is an important one, is that not all
of these companies are bankruptcy candidates. One member of the
list is already there. Another could go belly-up, but it could
also unload enough assets to stave off that situation.
The parent company of American airlines is already in bankruptcy,
which it filed for last year. American, once the largest U.S.
carrier, is familiar with bankruptcy. The Texas-based company
flirted with bankruptcy in 2009 and threatened bankruptcy in 2003
to force its employees to make wage concessions.
American has been punished by a variety of factors, not just
rising oil prices. That issue faces all airlines. High labor
costs, another issue for most airlines, have been troublesome for
American. As has customer service. As in American's customer
ranks at or near the bottom of an industry not
really known for treating its customers all that well
It has been quite a road for once proud American, the only
major legacy carrier not to seek bankruptcy protection after the
September 11 terrorist attacks in 2001. In fact, American was
able to play vulture and buy rival TWA out of bankruptcy court.
In ironic twist of fate, the last best hope for American is for
US Airways (NYSE:
) to buy it out of bankruptcy.
Chesapeake Energy (NYSE:
The second-largest U.S. natural gas producer has spent what feels
like most of 2012 doing one thing: Selling assets to raise cash
to reduce its massive and appease activist shareholder Carl
Icahn. Chesapeake has solid everything from shale acreage to
pipeline interests to cut into a
debt-to-equity ratio of almost 1.1
and a long-term debt-to-equity ratio of 1.03.
The company has sold enough assets to make it through 2012,
but it is facing a cash crunch for 2013 and the possibility
of almost $11.4 billion in debt at the end of
Chesapeake may not be the most logical bankruptcy candidates
if for no other reason than Ichan
recently boosted his stake in the firm
and he would be apt to force an outright sale of breakup of the
company before a bankruptcy. That is assuming Icahn is committed
to Chesapeake for a couple of more quarters. With all that debt
and low natural gas prices, Chesapeake's pickings are slim when
it comes to potential suitors.
MEMC Electronic Materials (NYSE:
It has been a dreadful year for solar companies, both of the
American and Chinese variety. Just look at the chart of the
Guggenheim Solar ETF (NYSE:
To be fair, MEMC has jumped over 41 percent in the past month
as the company procured some critical financing for a South
Africa project and the company's market cap has surged since
GMI Ratings noted
MEMC was a bankruptcy risk earlier this year.
The news has been better for MEMC recently, but that does not
obfuscate the fact that it has a debt-to-equity ratio of
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.