10 Shocking Corporate Meltdowns
Shocking corporate meltdowns never cease to amaze us. There are always vicissitudes in the market, and these routinely capsize smaller boats. But big ships aren’t supposed to sink -- just ask the passengers of the Titanic.
When major companies go bust, thousands of employees lose their livelihoods, and investors lose their shirts. In the worst instances, we all lose a little bit of our confidence in the honesty and decency of our fellow humans.
Let’s take a look at 10 of the most spectacular corporate meltdowns in history -- caused by everything from fraud to incompetence to court rulings.
10. Adelphia
Adelphia was a communications company founded way back in 1952. It went on to become the fifth-largest cable provider in the United States. Unfortunately, corrupt ownership led to the company’s sudden collapse in 2002.
It turned out the owner and his son had engaged in complicated transactions to hide the fact they had stolen about $100 million from the company. During the bankruptcy proceedings, it also came to light that Adelphia had more than $2 billion in hidden debt.
9. Polly Peck
Photo by Igor Starkov on Unsplash
You may not have heard of Polly Peck. It was a small textiles company based in the UK that had a meteoric rise in the 1980s. Unfortunately, it also crashed and burned like a meteorite.
It collapsed in 1991, floundering under £1.3 of debt. Its CEO, Asil Nadir, then fled the UK to hide out in Cyprus. He later returned to England and was convicted of misappropriating £29 million.
8. Thomas Cook
Image by Kelvin Stuttard from Pixabay
Thomas Cook was one of the world’s oldest travel companies; it was 178 years old when it went broke in 2019. Investors had been shorting it throughout the year as the company had been struggling to restructure itself via closures and layoffs.
When the end came, it left more than 600,000 travelers stranded. One guy even reported that his resort was holding him hostage until he paid the money Thomas Cook owed them.
7. Pan American World Airways
It’s hard to believe, but Pan Am used to be America’s biggest airline. It was the unofficial flag carrier for the United States. But none of these distinctions protected it from going belly up in 1991.
The first sign of real trouble was the Lockerbie bombing of 1988. In that incident, a terrorist bomb destroyed a Pan Am flight over Scotland. It partly destroyed Pan Am’s brand as well.
The second crisis came with the 1991 Gulf War. The conflict drove up the price of oil drastically, making Pan Am’s transatlantic routes unprofitable. It ended up selling these off and filing for bankruptcy protection.