26 Nosferatu Lawsuit Bankrupted Prana Studio
German studio Prana began filming Nosferatu in 1921 without securing the rights to Dracula, the 1897 novel by Irish writer Bram Stoker. After the film appeared in 1922, a woman named Florence Stoker, the writer’s widow, sued Prana for $5,000 over copyright infringement. The lawsuit and the film’s box-office failure pushed the studio into bankruptcy after its first and only production. A judge gave her ownership of Nosferatu and backed her order to burn every print, effectively making possession illegal, but the film’s growing cult status helped several copies survive.
27. In 2005, former Washington Commanders owner Dan Snyder took control of Six Flags after winning a proxy fight, although he never owned the entire company. He became chairman, installed new management, and tried to make the parks more family-friendly. Despite operational improvements, Six Flags remained crushed by $2.4 billion in inherited debt and $175 million in annual interest expenses. The company filed for Chapter 11 bankruptcy in June 2009, wiping out Snyder’s equity stake before he left the board in 2010.
28. From 2005 to 2008, a man named Ausaf Umar Siddiqui, a Fry’s Electronics vice president earning $225,000 a year, gambled more than $162 million in Las Vegas. He financed his gambling through a kickback scheme in which vendors paid two sham companies he controlled, allowing him to steal $65.6 million. After pleading guilty to wire fraud and money laundering, Siddiqui filed for bankruptcy in 2011 with nearly $137 million in debt. A federal judge sentenced him to six years in prison and ordered him to repay $65.5 million.
29. In 2001, American pop singer Katy Perry, then using her birth name Katy Hudson, released her debut gospel album Katy Hudson through Red Hill Records. The album became a commercial failure and reached only about 100 people. Red Hill went into bankruptcy soon afterward, ending her first record deal. Perry endured several more failed deals before Capitol Records signed her in 2007.
30. In January 2001, Japanese businessman and Sega president Isao Okawa returned his entire Sega stake and donated stock in related companies, a package worth about $695 million, to keep Sega from bankruptcy. He also forgave Sega’s debts to him as the company abandoned the loss-making Dreamcast, a decision expected to cost it 80 billion yen. The rescue helped Sega survive its shift from console hardware to third-party game development. Okawa died of heart failure in March 2001, at age 74, after suffering from cancer.
31 Circuit City Rejected Best Buy
In late 1988, Circuit City had the chance to purchase its growing rival Best Buy for $30 million. Richard Sharp, Circuit City’s CEO, rejected the offer because he believed the chain could enter Best Buy’s home territory of Minneapolis and easily defeat it. Competition from Best Buy instead became one of several factors behind Circuit City’s collapse. Circuit City filed for Chapter 11 bankruptcy in 2008, before liquidating its remaining stores by 2009.
32. The Cali Cartel and local “social cleansing” groups murdered hundreds of people they labeled “discardables” and often dumped their bodies in Colombia’s Cauca River. The victims included sex workers, street children, petty thieves, gay people, and homeless people. The Cauca became known as the “River of Death,” while the municipality of Marsella in Risaralda had to recover the corpses and conduct autopsies. Those costs eventually pushed Marsella into bankruptcy.
33. In 1964, Nike was still Blue Ribbon Sports, selling Japanese Onitsuka Tiger shoes from cofounder Phil Knight’s car, while Converse controlled roughly 70 to 80 percent of the basketball-shoe market. Converse filed for bankruptcy in 2001, then closed its last U.S. factories that March and moved all Chuck Taylor All-Star production overseas. Nike bought the revived company in 2003 for $309 million.
34. In 1991, Cult Awareness Network director Cynthia Kisser described Scientology as the most ruthless, terroristic, litigious, and lucrative cult in America. That year, more than 50 Scientologists filed civil suits against CAN, many using nearly identical claims through the same Los Angeles law firm. The lawsuits overwhelmed CAN’s $300,000 annual budget, but a $1 million judgment over its role in the forced deprogramming of a Pentecostal man named Jason Scott ultimately pushed it into bankruptcy in 1996. A Scientologist lawyer named Steven L. Hayes bought CAN’s name, logo, post office box, and hotline, then licensed them to the foundation that launched the New Cult Awareness Network.
35. In November 2018, reports revealed that a man named Liu Lirong, Gionee’s founder and chairman, had lost more than 1 billion yuan, about $144 million, gambling at a casino in Saipan. Liu denied misusing Gionee’s money but admitted that he might have borrowed company funds. Meanwhile, the Chinese phone maker had stopped paying suppliers, and 20 of them sought bankruptcy reorganization. In December 2018, the Shenzhen Intermediate People’s Court accepted an application for Gionee’s bankruptcy liquidation.
36 Souk Al-Manakh Crash Crippled Kuwait
By 1982, Kuwait’s unofficial Souk Al-Manakh had grown into the world’s third-largest stock market by capitalization, trailing only the United States and Japan. Traders inflated it with postdated checks until one check from a young Passport Office employee bounced in August 1982 and exposed the system. Investigators found $94 billion in worthless checks tied to about 6,000 investors, leaving every Kuwaiti bank except the National Bank of Kuwait technically insolvent. Central bank support prevented mass bankruptcy, but the crash and falling oil revenues pushed Kuwait and the wider Gulf into recession.
37. In April 1972, Lockheed delivered the L-1011 TriStar, the most technologically advanced commercial jet of its era, to Eastern Airlines. On May 25, its automatic flight-control system flew from the takeoff roll in Palmdale, California, to landing at Dulles Airport without a pilot touching the controls. Developing its RB211 engine drove Rolls-Royce into bankruptcy in 1971 and pushed Lockheed close to collapse, prompting a British rescue and a $250 million U.S. loan guarantee. Lockheed ultimately built only 250 TriStars before leaving the commercial passenger-aircraft business.
38. In 1995, Ohio Art’s Etch A Sketch appeared for 12 seconds in Pixar’s Toy Story, and demand rose enough to force its production line into overtime. The cameo rescued the company from bankruptcy, but another financial crisis arrived in 1999, when canceled orders brought it closer to bankruptcy. Ohio Art then agreed to another appearance in Toy Story 2, where the toy remained onscreen for 45 seconds. Sales jumped 20 percent, and that second appearance saved the company.
39. In 1973, American businessman and FedEx founder Frederick Smith watched his company approach bankruptcy with only $5,000 left and a $24,000 fuel bill due. After General Dynamics rejected his request for funding, Smith flew to Las Vegas and reportedly turned the company’s last $5,000 into $27,000 playing blackjack. The winnings kept FedEx operating for another week while Smith secured further financing. He eventually raised another $11 million, and FedEx recorded its first profit in 1976.
40. Swiss-born American race car driver and engineer Louis Chevrolet co-founded the Chevrolet Motor Car Company in Detroit in 1911 but sold his stake after clashing with businessman William C. Durant. Later automobile and aircraft ventures failed, one Frontenac operation entered bankruptcy, and the Great Depression wiped out Chevrolet’s remaining fortune. Nearly penniless, he returned to Detroit in the 1930s and worked for a period as a mechanic at a Chevrolet plant. Poor health forced him into retirement before he died in 1941, aged 62.
41 Henry Knox Left Bankrupt Estate
American Revolutionary War general Henry Knox gave his name to Kentucky’s Fort Knox, beside the U.S. Bullion Depository that stores much of the nation’s gold. After retiring to Thomaston, Maine, in 1795, Knox borrowed heavily for lumbering, shipbuilding, livestock, brickmaking, and land speculation, but many of those ventures failed. He had started repaying his debts when a swallowed chicken bone lodged in his throat and caused a fatal infection, killing him on October 25, 1806. Knox’s death left his estate effectively bankrupt, forcing his wife Lucy to sell more family property to pay creditors.
42. Sears already sold appliances, parts, and tools through its e-commerce site in 1999. After hedge fund manager Eddie Lampert combined Sears and Kmart in 2005, the company spent about $6 billion buying back its own shares while sales declined and stores deteriorated. Sears filed for Chapter 11 bankruptcy in October 2018.
43. On October 8, 2003, American Tex-Mex chain Chi-Chi’s filed for Chapter 11 bankruptcy. One month later, green onions served at its Beaver Valley Mall restaurant near Monaca, Pennsylvania, triggered the largest hepatitis A outbreak in U.S. history. The outbreak killed at least four people and sickened 660 others across the Pittsburgh area. Chi-Chi’s settled the resulting lawsuits by July 2004 and closed all 65 remaining U.S. restaurants that September.
44. After its first bankruptcy filing in 2004, Hostess workers accepted wage cuts reaching 30 percent to help keep the bakery alive. In August 2011, Hostess stopped making union pension contributions and used wages earmarked for pensions to fund operations, calling the suspension temporary. It never restored that money and filed for bankruptcy again in January 2012. In 2013, a court approved the $410 million sale of most of its snack-cake business, while 19 executives overseeing the liquidation received approval for $1.75 million in bonuses.
45. In 1922, American inventor Thomas Edison’s financially struggling Edison Portland Cement Company supplied the concrete used to build the original Yankee Stadium in the Bronx. Edison adapted fine waste sand from his ore-milling business to produce harder, more durable concrete, and the stadium project used 45,000 barrels of his cement. However, bankruptcy did not end the company shortly after the stadium opened in 1923; the Great Depression forced it to dissolve in December 1931. Its successor, the Edison Cement Corporation, continued producing cement until June 1942.
15 Most Controversial & Costly Blunders in History
46 Outkast Briefly Revived Bankrupt Polaroid
After declaring bankruptcy in 2001, Polaroid received an unexpected image boost from American hip-hop duo Outkast’s 2003 hit “Hey Ya!” and its lyric “shake it like a Polaroid picture.” The company capitalized on the craze by sponsoring Outkast parties, distributing cameras, and arranging for the duo to hold them during performances. Although the song temporarily revived Polaroid’s fading public image, the company later stopped selling its original cameras and film and entered bankruptcy again in 2008.
47. On Black Tuesday in 1929, American businessman and General Motors founder William Durant joined members of the Rockefeller family and other financiers in buying large amounts of stock to show confidence in the collapsing market. The buying failed to halt the crash and cost Durant heavily, while his Durant Motors company failed in 1933. By 1936, Durant had fallen into bankruptcy. Former GM associates arranged a $10,000 yearly pension for him, after which he opened a bowling alley and fast-food restaurant in Flint, Michigan, and worked in its kitchen.
48. During Japan’s late-1980s bubble, a woman named Nui Onoue went from running an Osaka restaurant to handling billions after bankers and traders began treating her as a market oracle. Financial institutions ultimately lent her more than 2.7 trillion yen, over $20 billion, although her lawyers later claimed she knew nothing about stocks. When her investments soured, she used fake certificates of deposit to fraudulently acquire 342 billion yen, about $2.5 billion, from 12 institutions. Authorities arrested Onoue in 1991, and bankruptcy proceedings placed her debt at 430 billion yen, about $3.1 billion, then the largest personal bankruptcy in Japanese history.
49. After Japan Airlines filed for bankruptcy in January 2010, mass layoffs raised fears that more of its genuine flight attendant uniforms would reach Japan’s black market and sex industry. Fetishists and role-playing clubs already prized authentic uniforms, which could fetch thousands of dollars, especially when accompanied by a photograph of the attendant who wore one. JAL itself did not sell the uniforms; it required departing employees to return them, tracked every garment by serial number, and tried to prevent further sales because impostors could use them to enter restricted airport areas.
50. In 2018, American toy retailer Charles Lazarus, founder of Toys “R” Us, died of respiratory failure in New York City at age 94. Exactly one day later, the chain began liquidation sales across its U.S. stores following its bankruptcy. Lazarus had started with a children’s furniture shop in Washington, D.C., in 1948 before opening the first Toys “R” Us in Rockville, Maryland, in 1957.
