Recently in Corporate Bankruptcy Category

Iconic photography company Eastman Kodak has filed for Chapter 11 bankruptcy protection.

Kodak has been in business for 131 years. The company pioneered innovations in print film. It was widely considered the "Google" of its day. Kodak film accounted for 90% of the market in 1976. Kodak cameras accounted for 85% of the camera market.

Up through the 1990s the company was heralded as one of the top 5 most valuable brands, according to The Economist. Ironically, its downfall can partially be attributed to its own innovation: the digital camera, invented by Kodak in 1975.

MF Global is bankrupt. And for whatever reason, the trading firm is missing more than $600 million. The Securities and Exchange Commission is now said to be probing into the situation, and is looking into whether or not Jon Corzine misled investors.

Corzine headed the now-defunct brokerage firm. He is the former governor of New Jersey and ex-CEO of Goldman Sachs. The firm filed for bankruptcy on Monday.

The bankruptcy is recent news, but the firm faced increasing scrutiny from regulators the past few months.

The year didn't start out on a high note for Borders executives and shareholders. At the beginning of January, the bookseller was in discussions with publishers about deferring payments, as well as talking to lenders about refinancing its debt. Not only that, Borders began bleeding executives--vice presidents, the chief information officer, and even the general counsel. It was thus expected when the company filed for bankruptcy last week in a Manhattan court.

Borders blames the economic downturn and online competition for its predicament, and plans to close 200 of its 642 stores in the next few weeks. It's hoping that it can run the remaining locations more efficiently and competitively.

Word to the wise: before filing for bankruptcy, pay your In House Counsel $100,000 for a job well done. Although financial services company Ambac cited a whopping $1.7 billion in debt in their recently-filed Chapter 11 bankruptcy, the company managed to settle up with their In House Counsel Kevin Doyle shortly before filing the petition.

Kevin Doyle was paid $100,000 in "recognition of his efforts to maximize the company's cash position, thereby assisting the company in its efforts to emerge successfully from Chapter 11 bankruptcy proceedings." Generous? Yes.

The right thing to do? Questionable.

With Chapter 11 becoming a popular option for companies big and small, an In House associate may be ready to brush up on what is involved before offering advice on the process or calling up outside counsel.

Here is an rundown of what to expect as a company makes its way through a Chapter 11 filing:

1. Continuing Operations.  Filing for Chapter 11 makes the company a "debtor in possession" with a right to retain property of the estate and continue operating the business.

2. 341 Meeting.  About 20-40 days after filing, be ready for the "341" meeting where the trustee will ask about the company's assets and liabilities, income and expenses, and other financial queries.

3. Creditor's Committee.  The U.S. Trustee's office may go ahead and appoint a "creditor's committee" made up of the company's seven largest unsecured creditors.  The committee can participate in drafting the company's reorganization plan.

4. Reorganization Plan.  The company will be tasked with coming up with a plan on addressing its creditors, typically by prioritizing them.  The company will need a nod of approval from each class of creditors.

5. Debt Discharge.  On approval, the plan vests all property of the estate in the debtor and discharges all debts and liens incurred before the plan or as agreed to.

Related Resources:

• What to Expect: Filing Bankruptcy (FindLaw)

And now looking to the friendly skies, Southwest Airlines last week confirmed its plan to submit a bid for the bankrupt Frontier Airlines.  By getting the nonbinding proposal off the ground, in line with the bankruptcy court's requirement, Southwest can now officially check-in with Frontier to request information and documents as part of its due diligence efforts to research the company.

Southwest may be number one in daily domestic flight operations, but it came in second in making a move for Frontier.  Indiana's Republic Airways submitted its $108.8 million bid earlier last month.  The bid was provisionally agreed to by the judge, so long as no better offer came along before August 10th 2009. 

And then Southwest flashed its boarding pass to the bankruptcy show.