Bankruptcy can happen to anyone, or any company, it seems. Oreck Vacuum the latest well known name to file for bankruptcy protection.
I am trying to remember the tag line in the ads, but I remember the former owner, David Oreck, making some kind of guarantee.
The 50 year old company’s Chapter 11 filing blames, competition! Pretty much everyone has that, unless you are a utility or insurance company or some other special interest industry that owns enough of the political class.
What is the first thing many companies do upon filing bankruptcy? Why, borrow more money, of course!
In Chapter 11 bankruptcy cases, it is called D.I.P. financing, for debtor-in-possession. That means the debtor is still running the company, as opposed to some kind of trustee.
Oreck is borrowing $11 million dollars, right off the bat.
Who would lend to a newly bankrupt company?