I haven’t eaten a Hostess cupcake since I was six. Now, I guess I never will.

The shutdown of Hostess  dominated today’s business news. Reporters are speculating on why Hostess failed.

According to various commentators, Hostess’s demise was caused by:

1. People just don’t eat cupcakes wrapped in plastic the way they used to.

2. The cost of labor and unions’ unwillingness to cave.

3. The company was really, really mismanaged.

4. The price of sugar due to the power of the sugar lobby. Continue reading

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The Metropolitan Museum of Art’s recent “Impossible Conversations” exhibit is described by author Paula Marantz Cohen as a demonstration of post-modernism.  Post-modernism, writes Ms. Cohen, involves “contravening established conventions and expectations.”   I do not know what “skepticism toward meta-narratives”  means exactly, but Ms. Cohen explains this as “a puncturing of whatever may pretend to be universal or absolute.”   This explanation certainly brings her metaphor home for us bankruptcy types. Continue reading

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I trust I have gotten your attention now.  If you can suspend your disbelief momentarily, I promise this will be worthwhile to you – maybe even as soon as tomorrow.

The secret of Nigerian e-mail scams is far from obvious but it is astoundingly simple.  Recently an article in Computer World explained why such schemes are more successful than ever. - despite the fact that virtually every man, woman and child on the planet has heard of  ”Nigerian e-mail scams.” Continue reading

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As time goes on, the nature of bankruptcy news becomes more and more unusual. Dominating the bankruptcy news cycle lately has been the meltdown of the uber-law firm, Dewey LeBoeuf.  Over the past twenty four hours, it’s been reported that a liquidating chapter 11 is imminent, triggered by bondholders.


To most restructuring types, the most interesting aspect of this story is the fact the law firm obtained bond financing. According to public sources, Dewey issued $125 million in bonds in 2010 in a private placement. According to reports, the bonds were purchased primarily by insurance companies. Continue reading

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The Great Debate was a famous debate in 1920 between two astronomers over whether the Milky Way is the only galaxy.

At last weekend’s American Bankruptcy Institute Annual Meeting, in accordance with established tradition, the kick-off session was the “Great Debate.”  This year, the Great Debate took on the most timely, popular and pervasive of controversial subjects: whether parties trading on non public information in a bankruptcy case should be subject to mandatory trading restrictions.  Two prominent lawyers, both past ABI presidents, debated the topic, each taking the opposite side.

The first speaker argued in favor of such restrictions. Interestingly, he presented no concrete argument other than bankruptcy policy. His opponent, however, advanced much more concrete arguments against the institution of such restrictions. He made the rational and persuasive argument that none of the parties in a chapter 11 case are directly injured by claims trading – only the other party to the trade. Thus, there is no justification for creating causes of action based on conduct that bears no causal relationship to the other creditors’ losses. Continue reading

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Distressed companies often receive seemingly conflicting advice from restructuring professionals. They are told: “stick to your knitting” and “stay inside your wheelhouse” and “hit your sweet spot.”

They are also told to “think outside the box” and “color outside the lines” and “reconfigure”  - or else face zombification. Continue reading

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The women in New York amaze me. Every day on the subway, I observe women of all income levels, ages, and walks of life. They all have one thing in common: they are remarkably well put together.

For years I have analyzed this question: how do New York women present themselves to the world so effectively?  What exactly do they do to develop this “core competency”? Continue reading

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In the beginning of January 2012, Fuller Brush Company announced that “this was a landmark year … we have devoted a significant amount of time and effort toward creating new strategies to better serve our customers” and “refreshed our branding to meet the needs of today’s consumers.”  Last week, after declaring only last month that it had “rebooted,” Fuller filed chapter 11.

Fuller’s use of the word “reboot” – meaning the restarting of an electronic device – for a company that sells manual brushes which have been replaced largely by newer (and often electronic) technology – was ironic, and as it turns out, unfortunate. Continue reading

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First of all, let me say that I am not a Luddite. I am about as far from a Luddite as I could be. But there comes a point where, in my role of the blogger-in-chief for the collective unconscious of the restructuring world, I have to throw sabots in the looms. (Or, in this case, throw Louboutins at the iPads).

The word "sabotage" came from the word "sabot" - the clogs that Luddites threw at looms in protest of industrialization.

If the thought of someone hitting your iPad with a high heeled shoe makes you cringe, then you need to read this.

In a recent article,  Dave Paul Strohecher commented on Nick Pearce’s examination on his blog of the zombification of higher education. Pearce observed that the use of VLE’s (virtual learning environments) was replacing “face to face human learning” with “undead digital teaching”:


In the teaching model, VLE’s provide control and consistency in a way not possible with traditional methods. VLE’s do this by limiting personal interaction.  Strohecher suggests that teachers are driven to the use of VLE’s by student apathy. Continue reading

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Lululemon Athletica, a Canadian athletic apparel company, has a slogan on its shopping bags: “The world is changing at such a rapid rate that waiting to implement changes will leave you 2 steps behind. DO IT NOW, DO IT NOW, DO IT NOW.”

Before we talk about the slogan, a word about the shopping bags: they are light, durable, recyclable.  In Manhattan, everywhere you turn, a woman is carrying one.  Lulu has managed to turn the fashion capital’s female population into walking sandwich boards. How did Lulu do this? By rejecting the traditional wisdom that (1) conventional advertising is essential, and (2) shopping bags are thrown away and thus need to be as cheap as possible. Continue reading

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