Written by samom Thursday, 13 May 2010 12:39

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Economic Crunch and Business Bankruptcy

The economic crunch has imposed one of the toughest financial crises in America’s businesses today. This has resulted in the upsurge of business bankruptcy. Both the large businesses and the small businesses have been equally affected. The larger companies which opted to file for bankruptcy have of course suffered more losses. The majority of these companies cannot opt for the pre-pack administration because of the tax debts that they owe the government.

The effects of large companies going bankrupt are many and adverse. The first thing is the increased unemployment that faces the usually large staff working for these companies. This has a direct impact on the society at large because of the many families that will be affected.

The other thing is that economic growth and productivity will be lowered considering the annual revenues that these large companies pay to the government. This will in the long-term trickle down to the common man. It is in this regard that the current USA President, Barrack Obama and his predecessor, George Bush, have signed bills that seek to inject funds into revival schemes for the companies threatened by the economic recession. Among the notable big companies which faced business bankruptcy between 2008 and 2009 include Bear Stearns Investment Bank; Chrysler Automakers and General Motors Automakers among others.