than $60 million annually; Wall Street estimated its net worth at between $1 billion and $3 billion. □ When Ling-Temco Vought, a major defense contractor and the nation’s No. 2 steelmaker, placed itself in bankruptcy in 1986, it was at that time the largest U.S. company (65 subsidiaries, 56,000 workers, 78,000 retirees) ever to declare bankruptcy: LTV’s revenues in 1985 hit $8.5 billion (twice as much as its debts). □ Texaco took the record from LTV in 1987 as the biggest company to declare bankruptcy in U.S. history. It had $3 billion in cash and marketable securities and total assets of more than $35 billion—several times more than its outstanding debts. □ When three of H.L. Hunt’s sons placed Placid Oil Co. in bankruptcy in 1986, the company had $2 billion in assets, more than enough -cash flow and collateral to meet its debts, and it was angling to expand its oil business. .□ When th^trustees of Jim and Tammy Faye Bakker’s PTL ministry ' took it into bankruptcy in 1987, their piousjndustry owed only about $60 million and was worth at least $180 million, mainly because it includes the twenty-five-hundred-acre resort (Heritage U.S.A.) near Fort Mill, S.C., complete with a five-hundred-and- four-room hotel, a twenty-one-story hotel tower, condos, single-family homes and a shopping mall built to resemble an early twentieth-century Main Street. As for income, the Christian suckers had historically supplied PTL with about ten million dollars a month. n each of these cases, and in dozens of others that never made it to the front page, the corporations that went into Chapter 11 bankruptcy were healthy. Why, then, did they do it? Because Chapter 11 is one of the pleasanter ways to avoid the underside of real capitalism. As Big Business’s minstrels have told us and retold us so many times that we have suffered a partial lobotomy, the glory of America is that we are a nation that takes risks. They kept telling us that risk is the very blood of capitalism; the lack of it the anemia of socialism. They want us to believe capitalists are all robust daredevils, regular wildcatters, ready to gamble-everything for the big pot, the gusher; ready to lose everything, too, if it comes to that, and then hock their shirt and try again. Hollywood used that plot on us more than once (e.g., Boom Town, with Clark Gable and Spencer Tracy), but everyone who has outgrown folk tales and 1930s scripts knows all too well that much of big business perks along on a riskless capitalism—on a kind of “guaranteed” capitalism or “insured” capitalism or semisocial- istic capitalism. It is capitalism in which most of the risk is to the worker and the consumer, and as little as possible to the producer and owner and financier. he Bankruptcy Reform Act, at least in some parts, is just another ingredient of that kind of capitalism. Tnat can be seen in Francisco A. Lorenzo’s use of Chapter 11. Lorenzo, who entered the airline business in 1972 by taking over bankrupt Texas International Airlines, does not like unions. Not surprisingly, when he started New York Air, he did it with nonunion labor. When he made a move to buy Continental Airlines in Clinton St. Quarterly—Summer, 1988 9
RkJQdWJsaXNoZXIy NTc4NTAz