Bankruptcy, Part II
July 10, 2009
Back in October, we posted the BPM or Bankruptcy Page Metric, which was just a count of the pages of Chapter 11 filings in the US Bankruptcy Court, District of Delaware. From a base of 3 pages of filing in January, 2008, the number of pages in the filings jumped to 16 pages in August, 2008.
Now, we see this statistic from the Washington Business Journal
More than 14,000 businesses filed for bankruptcy protection in the first quarter of 2009, a 64 percent increase over the same period a year earlier.
Nearly 10,000 of the business filings in the first quarter were Chapter 7 liquidations. Chapter 11 reorganizations accounted for 3,421 filings.
Chapter 7, as you know, means the doors are closed. No continuing operations ala Chrysler, GM, etc.
Every buyer and materials manager needs to have contingency plans in place to respond to a bankruptcy. Start with monitoring the credit scores and status of your vendors through your vendor program. Then have direct and frank conversations with your suppliers to understand their current situation and how you can work with them to keep the worst from happening.
Entry Filed under: Know Your Vendor, risk management. .
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