Going deep into business debt is a stressful and harrowing experience. Plummeting profits, dipping sales and the inability to make loan payments are often omens of bankruptcy — a business's worst nightmare. But filing for bankruptcy doesn't always mean the end of a company's life. In fact, in some cases, it can even mean the opportunity to create a new beginning. These five well-known companies were able to do just that, and are still operating today after surviving dire financial crises.
American Airlines
American Airlines is far from the only major passenger airline to emerge from bankruptcy — Delta, United and Air Canada have all done it, too — but American's recovery story is one of the most impressive. The company and its parent, AMR Corp., filed for bankruptcy in November 2011. By early 2014, AMR and US Airways Group had completed a merger to form the world's largest airline, American Airlines Group. Despite the new company's hefty bankruptcy costs and court settlements, 2014 was American Airlines' first profitable year since 2007, CNN Money reported, and the airline recently entered the S&P 500.
Ashley Stewart
Plus-size women's fashion brand Ashley Stewart got about as close to the end of the line as a business can get. In March 2014, the company filed for bankruptcy for the second time within three years. Prospects were looking grim; local stores were shutting down left and right, and investors weren't eager to be associated with what appeared to be another failing retailer. But executive chairman and CEO James Rhee had a vision to reinvent Ashley Stewart as an e-commerce and social-media-driven company. The brand's saving grace came in the form of a buyout by private equity firm Clearlake Capital, which purchased Ashley Stewart just one month after the bankruptcy filing. The company began to rebuild under Rhee's leadership, and currently has plans to relaunch its mobile site, develop a blog and create new content for its YouTube channel, Ashley TV, according to a March 2015 Plus Model Magazine article. When asked how the company was able to pull through its financial woes, Rhee told Business News Daily that it took "vision, mission and resolve, and the ability and willingness to embrace full transparency in the hopes of unifying and mobilizing an army of believers and doers." [Filing for Bankruptcy: Information, Benefits & Disadvantages]
Betsey Johnson
Though her fashion company is thriving today, designer Betsey Johnson fell on hard times just a few years ago. Profits fell drastically from their $150 million peak in the mid-2000s, and in April 2012, Betsey Johnson LLC filed for Chapter 11 bankruptcy, even after Steve Madden purchased the company's outstanding debts and licensing agreements in 2010. This resulted in 350 layoffs and the closing of nearly all Betsey Johnson retail stores, according to The New York Times. But that didn't stop Johnson: the Times article reported that by the end of 2012, she had already started to rebuild her company by introducing a new, lower-priced line of dresses that still embodied her classic, whimsical style. Last year, with online sales still holding strong, Johnson told Racked.com that e-commerce has "proven to be what keeps businesses kicking."
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General Motors
The economic recession of 2008 brought bankruptcy upon a number of high-profile corporations and financial institutions. Among them was General Motors (GM), one of the most important and influential companies in American history. Founded in 1908, the once-powerful auto manufacturer ended its 100th anniversary year with a debt of more than $30 billion. It filed for Chapter 11 bankruptcy in June of 2009, and with the help of government funding and a radical restructuring plan by corporate bankruptcy expert Jay Alix of AlixPartners, GM made an initial public offering in 2010. The company was profitable again by the end of that year, and it's only continued to thrive, with a July 2015 earnings release showing a net income of $1.1 billion. Alix shared his side of the GM recovery story in a 2013 Forbes article.
Kodak
For more than 100 years, the Eastman Kodak Company was a giant of the photographic film industry. But like many older companies, Kodak became a victim of changing times and technologies. As digital photography entered the mainstream in the late 1990s and early 2000s, the company's film sales floundered. Kodak struggled to keep up with the transition to digital, and ultimately filed for Chapter 11 bankruptcy in January 2012. After nearly two years of corporate reorganization, a new Kodak emerged in September 2013, branding itself as a "technology company focused on imaging for business," according to the company's website. Though its quarterly profits have declined since Democrat & Chronicle reported a $19 million high for the company in 2014 Q3, Kodak seems to have weathered the worst of its financial woes.