Harris Real Estate director Phil Harris was appointed president of the REISA in late September – the same month his agency settled a court battle with rival

Did some companies dissolve in the 2007-08 stock market crash?

Top 10 Bankruptcies of 2008

Nothing lasts forever, even in bankruptcy. The seemingly assured tenure of former telecommunications giant WorldCom Inc. atop the list of the largest bankruptcy cases ever filed in the U.S. lasted just over six years. The new titan among bankruptcy mega-filings was crowned on September 15, 2008, when 158-year-old international financial services conglomerate Lehman Brothers Holdings Inc. filed for chapter 11 protection in New York. The bankruptcy of Lehman Brothers is (by far) the largest bankruptcy filing in U.S. history, with Lehman holding nearly $700 billion in assets—nearly seven times the assets held by WorldCom when it filed for bankruptcy protection in 2002. Lehman’s bankruptcy also represented the largest failure of an investment bank since the collapse of Drexel Burnham Lambert in 1990. Lehman was founded in 1850 and was headquartered in New York, New York, with regional headquarters in London and Tokyo. At the time of the bankruptcy filings, Lehman had more than 25,000 employees worldwide and was the fourth-largest investment bank in the U.S.

Lehman confronted unprecedented losses in 2008 due to the subprime-mortgage crisis that began in mid-2007, principally because it held approximately $4.3 billion in subprime and other lower-rated mortgage-backed securities. After discussions with several potential purchasers (including Bank of America and Barclays PLC) proved to be unsuccessful during the late summer of 2008, Timothy F. Geithner, the president of the Federal Reserve Bank of New York, called a meeting on September 12, 2008, to discuss Lehman’s future, including the possibility of an emergency liquidation of the company’s assets. By the end of that day, any interest by potential suitors for all or part of Lehman’s assets appeared to evaporate, and the federal government refused to offer any assistance in the form of a bailout or loan guaranties, which it had provided in the spring of 2008 to facilitate the acquisition by JPMorgan Chase & Co. of 85-year-old Wall Street icon Bear Stearns Cos., Inc., once the fifth-largest securities firm in the U.S., using up to $30 billion in Federal Reserve emergency financing.

On the day that Lehman filed for bankruptcy, sometimes referred to as “Ugly Monday,” the Dow Jones Industrial Average closed down just over 500 points, resulting in the SEC’s prohibition of naked short selling and a three-week temporary ban on all short selling of financial stocks. At the time, the decline represented the largest drop by points in a single day since the days following the September 11, 2001, terrorist attacks (it was subsequently eclipsed just two weeks later on “Dark Monday,” September 29, when the Dow experienced its largest daily point drop ever (more than 770 points), after Congress failed (albeit temporarily) to approve a $700 billion bailout). Contemporaneous with Lehman’s decision to seek bankruptcy protection, another pillar of Wall Street—94-year-old brokerage giant Merrill Lynch & Company Inc. (the largest brokerage firm in the U.S.)—announced that it had agreed to be purchased by Bank of America for just over $50 billion in stock, rather than hazard the risk of being pulled under by the maelstrom of failure that had already swallowed Bear Stearns and Lehman Brothers.

Bankruptcy judge James M. Peck approved an emergency sale of Lehman’s investment banking and brokerage operations, including Lehman’s 32-story, Midtown Manhattan office tower, to Barclays Capital, Inc., for $1.35 billion in the early hours of September 20, 2008. In connection with the sale, Lehman’s brokerage subsidiary, Lehman Brothers Inc., which was not a chapter 11 debtor because it is a registered broker-dealer, agreed to the commencement of a liquidation proceeding against it under the Securities Investor Protection Act of 1970. Judge Peck later approved the sale of Lehman’s Asia-Pacific, European, and Middle Eastern operations, which were collectively responsible for more than 50 percent of Lehman’s global revenue in 2007, to Nomura Holdings, Inc., Japan’s largest brokerage firm, for approximately $2 billion. The full impact of the Lehman bankruptcy on the U.S. and world financial markets, as well as the thousands of companies and individuals who traded with Lehman, remains to be seen. According to some estimates, Lehman’s emergency bankruptcy filing wiped out as much as $75 billion of potential value for creditors.

Lehman Brothers is a hard act to follow under any circumstances, but the company that took the second spot on the Top 10 List for public bankruptcy filings in 2008 is nearly as remarkable, even in a year of catastrophic failures. Logging in at No. 2 for 2008 was Washington Mutual, Inc., a savings bank holding company and the former owner of Washington Mutual Bank, which was once the largest savings and loan association in the U.S. (adding yet another ignominious superlative to the annals of U.S. bankruptcy history). On September 25, 2008, the U.S. Office of Thrift Supervision (“OTS”) seized Washington Mutual Bank and placed it into receivership under the auspices of the Federal Deposit Insurance Corporation (“FDIC”), after $16.4 billion in deposits were withdrawn from the bank during a 10-day period. The FDIC immediately sold the banking subsidiaries for $1.9 billion to JPMorgan Chase, which reopened the bank the next day. The holding company, which was left with $33 billion in assets and $8 billion in debt, filed for chapter 11 protection the next day in Delaware.

Washington Mutual’s closure (and receivership) is the largest bank failure in U.S. history. It was once the sixth-largest bank in the U.S. According to Washington Mutual, Inc.’s annual report for 2007, as of December 31, 2007, the company held assets valued at $327.9 billion. In its chapter 11 filings, however, Washington Mutual, Inc., listed assets of $33 billion and debt of $8 billion. Washington Mutual Bank operated 2,257 retail banking stores and 233 lending stores and centers in 36 states. It was one of the 25 federally insured banks that were shut down in 2008.

The third-largest public bankruptcy filing of 2008 involved another banking giant, Pasadena, California-based IndyMac Bancorp, Inc., which, until July 11, 2008, was the holding company for hybrid thrift/mortgage bank IndyMac Bank, F.S.B. IndyMac Bank originated mortgages in all 50 states of the U.S. and was the seventh-largest savings and loan company nationwide. On July 11, 2008, citing liquidity concerns, the OTS placed IndyMac Bank into conservatorship with the FDIC. A bridge bank was established to assume control of IndyMac Bank’s assets and secured liabilities (such as insured deposit accounts), and the bridge bank was also placed into conservatorship under the FDIC’s control. The failure of IndyMac Bank is the seventh-largest bank failure in U.S. history and the second-largest failure of a regulated thrift. Its holding company, IndyMac Bancorp, Inc., filed for chapter 7 on August 1, 2008, in California to liquidate its remaining assets. IndyMac Bancorp reported more than $32 billion in assets in its annual report for 2007, but the holding company listed only between $50 million and $100 million in assets when it filed for chapter 7.

Logging in at No. 4 on the Top 10 List for 2008 was yet another bank holding company, Newport Beach, California-based Downey Financial Corp., which operated as the holding company for Downey Savings and Loan Association, F.A., until November 21, 2008, when federal regulators seized the bank due to its failure to satisfy minimum capital requirements. As of September 30, 2008, Downey Savings and Loan had 170 branches in California and five branches in Arizona. The bank lost $547.7 million in the first nine months of 2008, largely due to extensive holdings in subprime adjustable-rate mortgage loans.

The banking operations of Downey Savings and Loan were immediately sold to U.S. Bank, N.A., in a transaction facilitated by the OTS and the FDIC. The sale transaction also involved the banking subsidiary of PFF Bancorp, Inc. (No. 10 on the Top 10 List for 2008), PFF Bank & Trust, which was also seized by federal regulators on November 21, 2008, after posting losses from subprime-mortgage loans aggregating nearly $290 million through the first three quarters of 2008. Downey Savings and Loan had total assets of $12.8 billion and total deposits of $9.7 billion as of September 30, 2008. On November 25, 2008, Downey Financial Corp. filed a voluntary chapter 7 petition in Delaware to liquidate its remaining assets. Although Downey Financial reported $13.4 billion in assets as of September 30, 2008, the holding company’s chapter 7 petition listed only between $10 million and $50 million in assets.

Capturing the No. 5 spot was the first nonbanking or non-financial services company to appear in the Top 10 List for 2008. The Chicago-based Tribune Company, which through its subsidiaries operates as a U.S. media and entertainment company engaged in newspaper publishing, television and radio broadcasting, and entertainment operations, filed for chapter 11 protection in Delaware on December 8, 2008, listing more than $13 billion in assets. The debtor owns the Chicago Tribune, Los Angeles Times, and Baltimore Sun newspapers. Its broadcasting holdings include WPIX in New York, KTLA in Los Angeles, and WGN in Chicago. Other assets include the Chicago Cubs baseball team, Wrigley Field, a share in the Food Network cable channel, and stakes in various online entities. The Cubs and Wrigley Field, both of which are for sale, were not included in the bankruptcy filing. The Tribune Company was a victim of declining revenue, the general economic malaise, and the credit crunch. Its enormous debt load—nearly $13 billion—coupled with an industrywide downturn in advertising and circulation revenue, made it impossible to stave off bankruptcy. Other newspaper publishers are struggling with the same confluence of bad news. The Tribune Company’s bankruptcy filing is the largest (ranked by total pre-petition assets) publishing-industry bankruptcy of all time.

The No. 6 spot on the Top 10 List for 2008 belongs to Brea, California-based Fremont General Corporation, a financial services holding company that, through its subsidiary Fremont General Credit Corporation, owned the California bank Fremont Investment & Loan. Fremont Investment & Loan operated 22 branches in California. Founded in 1963 as Lemac Corporation, Fremont General Corporation wrote nonprime and subprime home mortgages nationwide until 2007 and sold the loans into the secondary market, retaining the servicing. It was hit hard by the housing bust and sold its subprime-lending unit to various investors. The company also sold its commercial real estate lending operations to iStar Financial in 2007 and sold the retail deposits and branches of Fremont Investment & Loan to CapitalSource Inc. for approximately $170 million in 2008. Fremont General Corporation filed for chapter 11 protection on June 18, 2008, in California. Although the company reported nearly $12.9 billion in assets in its most recent financial statements, it listed only $643 million in assets and debts exceeding $320 million in its bankruptcy filings.

Seventh place on the list of the largest public bankruptcy filings in 2008 went to Tulsa, Oklahoma-based SemGroup, L.P., a privately held midstream service company with public operating subsidiaries that provide the energy industry with the means to move products from the wellhead to wholesale marketplaces located principally in the U.S., Canada, Mexico, and the United Kingdom. SemGroup, L.P., filed a chapter 11 petition in Delaware on July 22, 2008, after revealing that its traders, including cofounder Thomas L. Kivisto, were responsible for $2.4 billion in losses on oil futures transactions and the company faced insurmountable liquidity problems. The company listed more than $6.1 billion in assets at the time of its bankruptcy filing. As of 2007, SemGroup, L.P., was the 18th-largest private company in the U.S.

Houston, Texas-based Franklin Bank Corp., a savings and loan holding company that until November 7, 2008, provided community and commercial banking services, including single-family mortgage origination, through its wholly owned subsidiary, Franklin Bank, S.S.B., had the dubious distinction of being No. 8 on the Top 10 List for 2008. Ironically, the company, which was headed by Lewis Ranieri, who helped create the mortgage securities market in the 1980s while at Salomon Brothers Inc., was a victim of the current mortgage crisis, but on the commercial rather than residential side. In addition to its corporate offices in Houston, the company had 38 community banking offices in Texas; seven regional commercial lending offices in Florida, Arizona, Michigan, Pennsylvania, Colorado, California, and Washington, D.C.; and mortgage origination offices in 19 states throughout the U.S. On November 7, 2008, Franklin Bank, S.S.B., was closed by the Texas Department of Savings and Mortgage Lending, and the FDIC was named receiver. The bank’s deposits were immediately sold by the FDIC to Prosperity Bank of El Campo, Texas. Franklin Bank, S.S.B., reported total assets of more than $5.5 billion as of September 30, 2008, and total deposits of $3.7 billion. Franklin Bank Corp. filed a chapter 7 petition in Delaware on November 12, 2008, to liquidate its remaining assets.

The penultimate spot on the Top 10 List for 2008 went to Philadelphia-based Luminent Mortgage Capital, Inc., a real estate investment trust investing primarily in both prime- and subprime-mortgage loans and mortgage-backed securities. Luminent, which once invested in billions of dollars of mortgages, including many rated “triple-A,” collapsed as investor demand for many fixed-income securities vanished and the company was crippled by liquidity problems as it was forced to sell many assets at a loss to meet margin calls and heavy write-downs. Luminent filed for chapter 11 protection on September 5, 2008, in Maryland, listing just $13.4 million in assets and $486.1 million in debt as of July 31, 2008. The company previously reported more than $4.7 billion in assets.

Securing the final spot on the Top 10 List for public bankruptcy filings in 2008 was Rancho Cucamonga, California-based PFF Bancorp, Inc., the parent company of PFF Bank & Trust, which was seized by federal regulators on November 21, 2008, together with Downey Savings and Loan Association, F.A. (No. 4 on the Top 10 List), after posting losses from subprime-mortgage loans aggregating nearly $290 million through the first three quarters of 2008. The banking operations of PFF Bank & Trust and Downey Savings and Loan were immediately sold to U.S. Bank, N.A., in a transaction facilitated by the OTS and the FDIC. PFF Bank, which had 30 branches in California, had assets of $3.7 billion and deposits of $2.4 billion at the time it was seized by regulators. PFF Bancorp filed for chapter 11 protection on December 5, 2008, in Delaware. At the time of the filing, the holding company listed only between $10 million and $50 million in assets, although it had previously reported more than $4.1 billion in assets in its most recent financial statements.

Largest Public Bankruptcies of 2008


Filing Date




Lehman Brothers Holdings Inc.



$691 billion

Investment Banking

Washington Mutual, Inc.


D. Del.

$328 billion


IndyMac Bancorp, Inc.


C.D. Cal.

$32.7 billion


Downey Financial Corp.


D. Del.

$13.4 billion


The Tribune Company


D. Del.

$13 billion


Fremont General Corporation


C.D. Cal.

$12.9 billion

Financial Services

SemGroup, L.P.


D. Del.

$6.1 billion


Franklin Bank Corp.


D. Del.

$5.5 billion


Luminent Mortgage Capital, Inc.


D. Md.

$4.7 billion

Real Estate Investment

PFF Bancorp, Inc.


D. Del.

$4.1 billion


Pilgrim’s Pride Corporation


N.D. Tex.

$3.8 billion

Poultry Production

LandAmerica Fin. Group, Inc.


E.D. Va.

$3.8 billion


Circuit City Stores, Inc.


E.D. Va.

$3.7 billion


WCI Communities, Inc.


D. Del.

$2.9 billion

Home Construction



S.D. Fla.

$2.8 billion

Home Construction

VeraSun Energy Corporation


D. Del.

$1.8 billion


Linens ‘n Things, Inc.


D. Del.

$1.7 billion


Tropicana Entertainment, LLC


D. Del.

$1.7 billion


Quebecor World (USA) Inc.



$1.7 billion

Print Media

Hawaiian Telcom Comms., Inc.


D. Del.

$1.6 billion





$1.4 billion


Bally Total Fitness Holding Corp.



$1.4 billion


Integrity Bancshares, Inc.


N.D. Ga.

$1.3 billion


Chesapeake Corporation


E.D. Va.

$1.2 billion

Packaging Prods. Mfg.

Frontier Airlines Holdings, Inc.



$1 billion


2008 U.S. Bank Failures



Failure Date

Sanderson State Bank

Sanderson, Texas


Haven Trust Bank

Duluth, Georgia


First Georgia Community Bank

Jackson, Georgia


PFF Bank & Trust

Pomona, California


Downey Savings and Loan

Newport Beach, California


The Community Bank

Loganville, Georgia


Security Pacific Bank

Los Angeles


Franklin Bank, S.S.B.



Freedom Bank

Bradenton, Florida


Alpha Bank & Trust

Alpharetta, Georgia


Meridian Bank

Eldred, Illinois


Main Street Bank

Northville, Michigan


Washington Mutual Bank

Henderson, Nevada, and Park City, Utah



Northfork, West Virginia


Silver State Bank

Henderson, Nevada


Integrity Bank

Alpharetta, Georgia


The Columbian Bank and Trust

Topeka, Kansas


First Priority Bank

Bradenton, Florida


First Heritage Bank, N.A.

Newport Beach, California


First National Bank of Nevada

Reno, Nevada


IndyMac Bank

Pasadena, California


First Integrity Bank, NA

Staples, Minnesota


ANB Financial, NA

Bentonville, Arkansas


Hume Bank

Hume, Missouri


Douglass National Bank

Kansas City, Missouri


Municipal Bankruptcies

Even though chapter 9 of the Bankruptcy Code has been in effect for more than 30 years, fewer than 200 chapter 9 cases have been filed during that time. Municipal bankruptcy cases—or, more accurately, cases involving the adjustment of a municipality’s debts—are a rarity, compared to reorganization cases under chapter 11. The infrequency of chapter 9 filings can be attributed to a number of factors, including the reluctance of municipalities to resort to bankruptcy protection due to its associated stigma and negative impact, perceived or otherwise, on a municipality’s future ability to raise capital in the debt markets. Also, chapter 9’s insolvency requirement, which exists nowhere else in the Bankruptcy Code, appears to discourage municipal bankruptcy filings.

As the enduring fallout from the subprime-mortgage disaster and the commercial credit crunch that it precipitated continue to paint a grim picture for the U.S. economy, municipalities are suffering from a host of troubles. Among them are skyrocketing mortgage-foreclosure rates and a resulting loss of tax base, bad investments in derivatives, and the higher cost of borrowing due to the meltdown of the bond mortgage industry and the demise (temporary or not) of the $330 billion market for auction-rate securities, which municipalities have relied upon for nearly two decades to float inexpensive debt in the $2.7 trillion U.S. market for state, county, and city debt. According to the National Conference of State Legislatures, states project a $97 billion shortfall over the next two years. This confluence of financial woes is likely to propel an increasing number of municipalities to the brink of insolvency and beyond. This may mean a significant uptick in the volume of chapter 9 filings.

The present-day legislative scheme for municipal debt reorganizations was implemented in the aftermath of New York City’s financial crisis and federal government bailout in 1975, but chapter 9 has proved to be of limited utility thus far. Only a handful of cities or counties have filed for chapter 9 protection. The vast majority of chapter 9 filings involve municipal instrumentalities, such as irrigation districts, public utility districts, waste-removal districts, and health-care or hospital districts. In fact, according to the Administrative Office of the U.S. Courts, fewer than 500 municipal bankruptcy petitions have been filed in the more than 60 years since Congress established a federal mechanism for the resolution of municipal debts. Until 2008, Bridgeport, Connecticut (pop. 138,000), was the only large city even to have attempted a chapter 9 filing, but its effort to use chapter 9 in 1991 to reorganize its debts failed because it did not meet the insolvency requirement. In 1999, mid-sized Camden, New Jersey (pop. 87,000), and Prichard, Alabama (pop. 28,000), also filed for chapter 9. Camden’s stay in chapter 9 ended abruptly when the State of New Jersey took over the failing city in 2000. Prichard confirmed its chapter 9 plan in October 2000. More recently, the City of Vallejo, California (pop. 117,000), filed a chapter 9 petition on May 23, 2008, claiming that it lacked sufficient cash to pay its bills after negotiations with labor unions failed to win salary concessions from firefighters and police. The San Francisco suburb became the largest city in California to file for bankruptcy and the first local government in the state to seek protection from creditors because it ran out of money amid the worst housing slump in the U.S. in more than a quarter century. Orange County, California (pop. 2.8 million), is the other prominent municipality to have taken the plunge. Having filed the largest chapter 9 case in U.S. history and confirmed a plan in 1995, Orange County stands alone as the only large municipal debtor to have navigated chapter 9.

Even so, the only alternative to chapter 9 is restructuring by the municipality under applicable state law, which may be difficult and require voter approval. The ability under chapter 9 to bind dissenting creditors without obtaining voter approval may make that option preferable. Thus, as the financial problems of municipalities continue to mount, there may be a significant surge in chapter 9 filings. To be sure, chapter 9’s utility in dealing with some of these problems may be limited. For example, to the extent that a municipality’s questionable investments include securities, forward or commodities contracts, or swap, repurchase, or master netting agreements, bankruptcy (and the automatic stay) will not prevent the contract parties from exercising their rights. Also, although a chapter 9 debtor can restructure its existing debt, new long-term borrowing is unlikely to be obtained at any favorable rate of interest. Still, the suspension of creditor collection efforts and the prospect of restructuring existing debt may mean that chapter 9 is the most viable strategy for many beleaguered municipalities.

Stockbroker Bankruptcies

By almost every estimate, the fallout from the subprime-mortgage/investment disaster and resulting credit calamity has proved to be worse than anticipated, numbering among its casualties more than 100 mortgage lenders, 25 federally insured banks and, in the span of only six months, no fewer than three of the top five brokerage firms in the U.S.: Bear Stearns Cos., Inc.; Lehman Brothers Holdings Inc.; and Merrill Lynch & Co. Bear Stearns was acquired by JPMorgan Chase in March 2008 for $1.2 billion in a fire sale transaction backstopped by up to $30 billion in federal financing to cover possible subprime-mortgage losses. Lehman Brothers was forced into bankruptcy on September 15, 2008, after talks with potential acquirers fell through and the federal government refused to provide any assistance in the form of a bailout. Fearing the same fate, Merrill Lynch agreed on September 14, 2008, to be acquired by Bank of America for $50 billion.

As the affairs of Bear Stearns, Lehman Brothers, and Merrill Lynch unraveled at lightning speed, there was a good deal of speculation that all of them might seek bankruptcy protection. Only Lehman Brothers ultimately did so, but its brokerage subsidiary did not file for bankruptcy. Moreover, although Bear Stearns and Merrill Lynch were global investment banking firms, a significant percentage of their businesses involved brokerage services. To the extent that any of their respective business entities are considered “stockbrokers” (defined generally to include any securities broker), those entities would be ineligible for relief under chapter 11 of the Bankruptcy Code. As a result, the alternative would be liquidation under either chapter 7 or the Securities Investor Protection Act of 1970 (“SIPA”).

The Bankruptcy Code precludes relief to a securities broker under any chapter other than chapter 7. Recourse to chapter 11 is precluded because the complexities of chapter 11 are incompatible with the narrow purpose for which the special stockbroker liquidation provisions in chapter 7 were designed—the protection of customers. Notable attempts have been mounted to circumvent that proscription, but with limited success. For example, Drexel Burnham Lambert Group Inc. filed for chapter 11 protection in 1990, but only after selling its brokerage operations, which were ultimately liquidated. Commodities broker Refco Inc. filed for chapter 11 in 2005, notwithstanding a similar ban on commodity-broker chapter 11 filings, contending that it should be permitted access to chapter 11 because its substantial brokerage activities were carried out by an offshore vehicle. The bankruptcy court ruled otherwise, and the Refco affiliate that was a registered commodities broker was liquidated in chapter 7 while Refco’s remaining operations and assets were ultimately liquidated in chapter 11. Lehman Brothers’ brokerage subsidiary, Lehman Brothers Inc., did not file for chapter 11 protection along with its parent. Instead, in connection with Lehman’s sale of its investment banking and brokerage operations to Barclays Capital, Inc., Lehman Brothers Inc. assented to the commencement of a liquidation proceeding against it under SIPA.

Thus, few options are available to stock or commodity brokers intent upon obtaining a breathing spell while they attempt to sort out financial problems brought on by the subprime disaster. More likely than not, escalating liabilities will propel many brokers toward either SIPA or chapter 7, both of which are geared toward protecting customers rather than creditors.

Notable Exits From Bankruptcy in 2008

Irvine, California-based New Century Financial Corp., once the second-biggest subprime-mortgage lender in the U.S., ended its 16-month stint in bankruptcy on August 1, 2008, after a Delaware bankruptcy court confirmed New Century’s liquidating chapter 11 plan on July 15. During its heyday as a mortgage-originating behemoth, New Century had 35 regional operating centers located in 18 states and originated and purchased loans through its network of 47,000 mortgage brokers, in addition to operating a central retail telemarketing unit, two regional processing centers, and 222 sales offices. New Century wrote nearly $51.6 billion in mortgages in 2006 and once employed more than 7,200 people. Its chapter 11 filing on April 2, 2007, was the largest public bankruptcy filing in 2007, involving more than $26 billion in assets.

Troy, Michigan-based Delphi Corporation, once America’s biggest auto-parts maker, obtained confirmation of a chapter 11 plan on January 25, 2008, but struggled throughout 2008 to secure exit financing or capital (including Delphi’s inability to close on a $2.55 billion investment from private equity fund Appaloosa Management) and has yet to emerge from bankruptcy more than a year after confirmation. Delphi filed for bankruptcy on October 8, 2005, in New York, listing $17 billion in assets and $22 billion in debt, including an $11 billion underfunded pension liability. While in bankruptcy, Delphi radically contracted its manufacturing presence in the U.S., with thousands of Delphi workers taking buyouts financed by General Motors Corp., which spun off Delphi a decade ago, and the closure or sale of plants that made low-tech products like door latches and brake systems. Delphi also negotiated lower wages with its remaining American workers. As a consequence, Delphi’s U.S. operations have become a small adjunct to its international businesses. At the end of 2007, only 28,000 of Delphi’s 169,000 employees worked in the U.S.

Auto-parts manufacturer Dana Corporation was able to secure $2 billion in exit financing en route to emerging from bankruptcy as Dana Holding Corporation on February 1, 2008, after obtaining confirmation of its chapter 11 plan on December 26, 2007. The Toledo, Ohio-based company filed for chapter 11 protection in New York on March 3, 2006, listing $7.9 billion in assets and $6.8 billion in debt.

Delta Financial Corp., the Woodbury, New York-based subprime lender that filed for chapter 11 protection in Delaware on December 17, 2007, after a financing deal with alternative asset management firm Angelo, Gordon & Co. collapsed because the derivatives market rejected Delta Financial’s efforts to securitize $500 million in nonconforming loans, obtained confirmation of a liquidating chapter 11 plan on December 12, 2008. When it filed for bankruptcy, the company listed more than $6.5 billion in assets.

Georgia-based NetBank Inc., a pioneer of internet banking that filed for chapter 11 protection on September 28, 2007, in Florida, hours after federal regulators shut down its online financial subsidiary due to problems associated with its home mortgage loans, announced shortly after filing for chapter 11 that it planned to liquidate its assets. It obtained confirmation of a liquidating chapter 11 plan on September 12, 2008. NetBank listed approximately $4.8 billion in assets at the time of its bankruptcy filing and was the fifth-largest public bankruptcy filing of 2007.

A Delaware bankruptcy court confirmed a chapter 11 plan on November 24, 2008, for Sea Containers Ltd., the London- and Bermuda-based shipping and railroad company, after the company was able to reach a crucial settlement regarding funding of its two U.K.-based pension funds. Blaming higher fuel prices and fallout from the July 2005 London terrorist bombings, the company filed for chapter 11 protection on October 15, 2006, after failing to make a scheduled $115 million debt payment. Sea Containers had nearly $2.75 billion in assets at the time of its bankruptcy filing and was the second-largest public bankruptcy filing of 2006.

Rochester Hills, Michigan-based components supplier Dura Automotive Systems Inc. finally emerged from bankruptcy on June 27, 2008, after obtaining confirmation of a chapter 11 plan on May 13, 2008. Dura had hoped to exit chapter 11 before the end of 2007, but credit market instability undermined its efforts to obtain acceptable exit financing. Dura filed for chapter 11 protection in Delaware on October 30, 2006, blaming an accelerating deterioration of the North American automotive industry, including escalating raw-materials costs. Dura’s filing was the third-largest in 2006, with the company listing more than $2 billion in assets.

Interstate Bakeries Corp. (“IBC”), the Kansas City, Missouri-based maker of Hostess Twinkies and Wonder Bread, obtained confirmation of a chapter 11 plan on December 5, 2008, after more than four years in bankruptcy, leaving completion of an exit financing deal and investment as the only impediments to the company’s emergence from bankruptcy. IBC filed for chapter 11 protection in September 2004 in Missouri in an effort to restructure $1.3 billion in debt. Under the plan, Ripplewood Holdings LLC will provide a $130 million equity investment, and IBC will fund its exit from bankruptcy with a $125 million senior secured revolving credit facility led by GE Capital Corp. and a $339 million first-lien term loan from Silver Point Finance LLC and Monarch Alternative Capital LP.

Global relocation services provider SIRVA, Inc., better known as Allied Van Lines Inc. and North American Van Lines Inc., obtained confirmation of its pre-packaged chapter 11 plan and emerged from bankruptcy on May 12, 2008, as a privately owned company just over three months after it filed for chapter 11 protection on February 5, 2008, in New York. The company reported more than $1.4 billion in assets prior to filing for bankruptcy.

Dothan, Alabama-based Movie Gallery, Inc., the nation’s No. 2 video rental chain, emerged from bankruptcy on May 20, 2008, after a Virginia bankruptcy court confirmed a chapter 11 plan involving a debt-for-equity swap and cancellation of the company’s existing common stock. Movie Gallery filed for chapter 11 protection on October 16, 2007, with approximately $1.4 billion in assets, after months of struggling with debt from its purchase of rival Hollywood Entertainment Corp. for $1 billion in 2005. Its filing was the sixth-largest public bankruptcy case of 2007.