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 Things sure are stormy these days in the bankruptcy world. Just look at the press releases and declarations put out by companies entering Chapter 11. They've now gotten into another jargon rut. A few years back, it was Sept. 11, then it was the subprime mortgage crisis. Recently it's been the run-up in oil prices or volatile credit markets. The new vogue, however, is mentioning a "perfect storm" of factors.
"The perfect storm of adverse market conditions beyond its control," for example, hit cargo carrier Tradewinds Airlines Inc., which filed for Chapter 11 on Friday. A "perfect storm" of factors also assailed truckload freight transporter Hoosier Tradewinds Inc., forcing its July 10 bankruptcy petition. And a source told The Deal's Jonathan Braude that "a perfect storm" had changed the environment for gambling machine maker JVH Gaming BV, forcing its parent to consider a debt restructuring. Even a recent press release from BankruptcyData.com comparing the year's largest filings with those of years past is titled "Forecasting a Perfect Storm" and cautions, "We seem to be in the midst of a 'perfect storm' leading to more bankruptcies: high levels of debt, high energy and raw materials costs and weakness in the U.S. economy." But the latest example of the term in court papers may be Delfasco Inc., a contract metal fabrication and forging company whose products include practice bombs for the U.S. military. In documents filed Monday with its bankruptcy petition in Delaware, Delfasco said factors including a lack of liquidity, the Iraq and Afghanistan wars and the need to sell its forge division "have all coalesced very quickly into a perfect storm that has forced a formerly robust small business to seek the protection of this Court." Has some public relations firm put out a handbook on how "perfect storm" must now be part of the excuse companies provide for filing for bankruptcy? Or is this just copycatting among lawyers? Hard to say. But business jargon, and bad business jargon at that, tends to perpetuate itself (case in point: incentivize) to the point it becomes part of the vernacular. So as a confluence of forces conspire to undercut the profitability and cash flow of companies, "perfect storm" seems to be a nice tidy phrase to tie them all together.That is, until another phrase comes around. Like the one now being advanced by one contestant on "Project Runway," who attaches "-licious" to everything he says. So if you think the language is in trouble now, how about if companies start saying that they had to file for bankruptcy because of a "liquiditylicious crisis" or to avoid "foreclosurelicious" or because of "defaultilicious on a bank loan"? - David Elman CategoriesComments
From: Paul Sinclair,
While we are talking about "incentivize", can we please do something about events which "impact" other things. This likewise was not an improvement in our language.
Posted on:
July 30, 2008 5:47 PM
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This is a great article on how a clever phrase can enter the lexicon. Little did Sebastian Junger know in 1997 that his book title would end up being the Smiley face of the bankruptcy bar.
Of course, given the high amounts of leverage currently on corporate balance sheets, the phrase is quite appropriate.
These days creditors would be lucky to find an empty life raft and some flotsam by the time the hearings come around. Just my opinion.