They were forced (largely by GE Capital) to file for Chapter 11 bankruptcy
protection. Insurance didn't cover the costs to rebuild or to pay wages and
now the lenders are moving in for the kill and
they can use your help.
In the US, there are at least two kinds of bankruptcy, Chapter
7 and Chapter
11. Chapter 7 is complete
liquidation; the company has ceased to be, it is no more, it has rung down
the curtain and joined the choir invisible. Many dot bombs fall into this category
(send.com, wine.com, pets.com, 3DFX, &c, &c). Chapter 11 is reorganization
and is far more common. Chapter 11 allows a company to restructure its debts
and obligations which will allow it to continue as a going concern. It's a little
like debt consolidation. If you have debt at high interest rates, you can consolidate
it and pay it off with a new loan at a lower rate. That way, everybody gets
paid (although not as much as you might have gotten under the original agreement)
but everybody gets something and the company can survive.
The big difference in this case is that Malden Mills occurred much this debt
by rebuilding the destroyed mill in the original town and keeping paychecks
coming to the Malden Mills employees while the construction was underway. Contrast
that with two other recent Chapter 11 filings. In the
first, the company first cut
off all health insurance and retirement funds then paid
massive bonuses to top executives. In the
the subject of Congressional hearings, questionable deals and who knows
what else brought on a total meltdown of the company and again, top
executives were bailing out and others
got huge bonuses while employees and retirees were forced
to watch their life
savings melt away and careers
come to a sudden halt. (One man who testified before the Senate yesterday
(12/19) had his entire retirement savings wiped out. Over the course of a 30+
year career, he had acquired over 16,000 shares of stock which, before the fall,
was worth around $1.3 Million. At close of business yesterday, that 16,000 shares
was worth about $8,000.)
So, all you out there who are so quick to condemn overseas sweat shops, all
those who are outraged at callous and cruel "big bad corporations,"
and are quick and eager to put them in their place, here's a chance to support
a business that does the right thing, whatever the cost. That cost has been
high and they could use some support. Employees are giving
up all their paid holidays through 2002 to help get the company back on
its feet. What can you do to show you support this sort of corporate responsibility?
Buy some fleece.
Buy some products
made with Polartec. It's great stuff.
can use something warm! :>