I’ve never been quite sure whether the phrase, “May you live in interesting times” is meant as a blessing or a curse. Regardless of your point of view, the first half of 2023 has been interesting, to say the least. Just after Memorial Day, we saw bankruptcy filings by Diebold Nixdorf (the Ohio-based manufacturer of ATMs, credit card readers and self-checkout machines), Wesco Aircraft Holdings (the aerospace supplier d/b/a Incora), and GenesisCare (the cancer care treatment provider). All three of these major Chapter 11’s occurred in the same 12-hour period. All three were victims of a scenario we‘ve seen many times before. Namely, taking on extreme debt which ultimately led to problems when macroeconomic headwinds changed.
Diebold started manufacturing bank vaults in the late 19th century and matured alongside the entire US banking industry. In 2016, it offered $1.8 billion in cash and shares to acquire its German rival, Wincor Nixdorf, to form Diebold Nixdorf. In announcing its intention to file for bankruptcy via a restructuring that many of its creditors had already agreed to support, it noted that a number of issues, including the pandemic and a continuing chip shortage, made it impossible to continue servicing its debt. In addition to pledging to continue paying suppliers while restructuring, the company is also looking to secure a $1.3 billion debtor-in-possession loan. Diebold’s stock will be cancelled, leaving shareholders with nothing after the dust settles, as occurs in nearly every bankruptcy.
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