Advertisement ::

Enlarge Cartoon

I can’t count the number of people from other countries (outside the US) who have told me they just don’t understand the US bankruptcy system. I occasionally make a stab at explaining it, saying that the idea behind Chapter 11 is that you don’t kill off the business, but help it get back on its feet. Trying to explain why this isn’t unfair to people owed money by the company that is in difficulty is something I do less well. I still get riled when I think about the $650 I was owed by Robert Maxell, once Rupert Murdoch’s rival, when Maxwell fell overboard at sea. The lawyers hired to sort out his unhealthy financial situation wrote to me at least twice a year for five or more years to tell me I was unlikely to get any money, but they were trying. No comment.

So here is a living, breathing example of how the system works. The Minneapolis Star & Tribune, one of the top 20 US newspapers for decades, filed for bankruptcy at the end of 2008. It was suffering, like everyone else in the media industry, from weaker business, fading advertising revenue and problems specific to its own financial history. The Star (actually known locally as the Strib) will soon rise, it seems. Read all about it!

You can leave a response, or trackback from your own site.