Hot Nacho's.... Too Hot?

Remember the McDonald's hot coffee case, that was awarded almost 3 million dollars to the plaintiff? Well I introduce to you the hot nacho case. A family took a trip to Walt Disney World and came back with a lawsuit. There 4 year old son bought some nachos and the nachos were so hot, that it burned his lips and burned it bad. This is an example of a tort or personal injury case, in this case Walt Disney is the tortfesser/defendant and the family is the plaintiff. The family has not asked for a specific amount of money but I am sure there will be a remedy. I believe the family should win this case because it was negligence on Walt Disney's part for not putting a label on the nachos or at least telling the family that the nachos were hot. In this case I would argue for strict liability because there was no warning or sign that said the nachos were hot. The family also argued as soon as the nachos touched the innocent boys lips it burned him immediately, only really hot nachos could do that kind of damage. I believe this innocent boy should have a big remedy and Walt Disney should pay for any hospital bill and any emotional distress the family went through. Walt Disney probably won't ever see this kid again but this kid is just starting his life and he has to live with this the rest of his life.

Business filing bankruptcy under chapter 11

To file or not to file bankruptcy is more of an unpopular decision rather a bad one. Before we go deeper into conversation lets understand, what is ‘bankruptcy’ and what is ‘bankruptcy filing’? The state of inability to pay debts is bankruptcy and to declare it and seek protection from federal government is the filing of bankruptcy. There are several chapters under which bankruptcy can be filed in federal court and one of the interesting chapters to talk about is chapter 11.Chapter 11 provides relief, protection, and saves the company from total collapse. It provide more time for the company to pay off the loan. Also at the same if the court finds them responsible then they will support them with more credits. There has been a rise in the filing of Chapter 11 because most businesses would like to continue to function despite harsh economic condition. The company does get some relief in the form of reduction in payment of debts, an easier payment plan and a chance to undergo reorganization or liquidation. It can be considered a double edge sword as it hurts the image of business drastically but might be a wise move, as it helps to reorganize. If the debtor is honest it will reap more benefit from this process.

Companies Filing For Bankruptcy

Borders and Giordano’s are only two of the many companies that filed for bankruptcy under chapter 11, though the reasons for their bankruptcy filing were different and they landed into totally different situation.

Borders Bankruptcy Filing

Burdened with too much debt, Borders Group Inc. filed for Chapter 11 protection. They were one of the country’s largest chains of book stores. They were forced to close more than 30% of their stores due to the fact that they were not making enough profit. About 200 of its 642 stores were closed. Filing for bankruptcy did give them a new start but at the same time during the process of liquidation they had to shut down even more of their stores. The number one reason for Borders downfall is the fierce competition from other online bookstores. The Filing under Chapter 11 allowed Borders to access new capital and reorganize its operations at the cost of huge liquidation. This made shareholders loose, further worsening the book store’s image. Borders are taking steps to infuse the confidence by promoting e-book and its online range of books. The company's largest unsecured creditors include major publishers that provide the books it sells. Borders owes Pearson Plc's Penguin $41.2 million, Hachette Book Group USA $36.9 million, and CBS Inc's Simon & Schuster $33.8 million, according to court documents. Time will tell whether Borders Group Inc. made the right decision in filing bankruptcy. At this point of time the future of Borders is a blank canvas.

Giordano’s Bankruptcy Filing

Giordano’s Enterprises Inc. has filed for bankruptcy protection after defaulting on real estate loans. The Florida real estate company was not doing well and as a result the pizza enterprise fell into the lap of 5th/3rd Bank because of its obligation. The only way was to seek protection under the federal law bankruptcy Chapter 11. So, they filled for bankruptcy in order to seek relief for their chain of pizza shops. They wanted further loans so that they could continue to pay their workers and the business could continue to function properly. Among the creditors are a Coca-Cola Bottling Co. bottler in Alsip, Saputo Cheese USA Inc. in Chicago and Turano Baking Co. in Berwyn. The court granted them a loan and all of their stores kept functioning. None of them went under liquidation because the Giordano’s does good business, they make a high profit. Giordano's made the wrong decision in supplying money to its sister company that was already drowning. If it was up to me, I would have rather saved the profit making company and file bankruptcy or not take additional loans for my sister company. Giordano's was lucky that the final outcome allowed them leniency due to their popularity.

Rise in bankruptcy is due to?

The downfall in economy is a big reason for the rise in bankruptcies, but more importantly it further leads to the fall in the economy, loss of confidence among investors, and even an increased unemployment. Questions that are likely to be asked are not only limited to the current business condition or the technical complications but also the post-bankruptcy impact, survival, investment loss and total collapse.

In prospective

In my opinion it is clear that the reasons on which the outcome of chapter 11 depends on are: transparency in transaction, over all business performance, potential to payback, support of business partners, and most importantly organization. The downfall of Borders was mainly due to lack of organization and anticipation, while Giordano’s survival can be credited to a more organized administration and popularity in the society. The following results can be attributed to the fact that may be food is more important to American’s than books. This can be lesson to others businesses that are planning to file chapter 11, in order to obtain rewarding result one needs to be honest and a structured unit.

In conclusion

Overall, the downfall of Borders was mainly due to lack of organization and anticipation. On the other hand, Giordano’s survival can be credited to a more organized administration and popularity in the society. One area is a bookstore the other area food store, descend of Borders and survival of Giordano’s might be due to the fact that books are less of important for survival than food. Reasons of the different outcome might transparency transaction, over all business performance, potential to payback, support of business partners are to name a few. This is a lesson to others businesses that are planning to file chapter 11, that in order to obtain rewarding result apart from being honest one be smart as well.