The Deal That Saved A $1 Trillion Company

Earlier this month Apple made headlines when its stock hit $207.39, making it the first company with a market valuation over $1 trillion. For the past 15 years or so this has seemed almost inevitable as “the fruit” revolutionized the music industry and the smartphone market, launched the ap market, and made everyone want a tablet. But not so long ago, Apple was teetering on the edge of bankruptcy.

In 1997, Apple was not doing so well. Products were flopping and the company lacked direction. Co-founder Steve Jobs had been ousted from the company in 1985, but was brought back on to see if he could turn things around. He claims he didn’t realize how bad things really were until he started digging in after his return, but later revealed that the company was about 90 days away from declaring bankruptcy.

What saved the company was not, however, a Chapter 11 restructuring, but a lifeline from a rival in the highly competitive tech industry. Jobs made a deal with Microsoft founder Bill Gates that saved the company.

Microsoft purchased $150 million worth of non-voting Apple shares and promised to hold on to them for at least three years. Microsoft also agreed to develop and support Office products on Mac systems. These pieces of the deal were both important because they gave Apple an immediate cash infusion and made Macs more desired by professionals who relied on the Office Suite.

In exchange, Apple made Internet Explorer the default browser on its machines. Both companies agreed to drop a lawsuit over the look and feel of their competing operating systems and settle various patent disputes.

Apple employees were not thrilled with the deal when it was announced, but Jobs rebuked them, saying, “If we want to move forward and see Apple healthy and prospering again … we have to let go of this notion that for Apple to win, Microsoft has to lose.”

The take-away from this story is that there are often alternatives to bankruptcy for fundamentally good companies that know where and when to ask for help. And sometimes that help comes from unexpected places. A large chuck of our firm’s business is helping clients who are at the point where they need to make some drastic moves to shore up their financial situation, or file for bankruptcy.

Over the years, we have assisted countless businesses through the minefield of the business workout. We have strong relationships with the lenders and attorneys whose cooperation and patience are a necessary component of any successful workout. Our track record has also given us credibility with commercial lenders, whose yes or no vote on a workout proposal typically means the difference between an opportunity to recover and a bankruptcy filing.

If your business is in financial trouble, and you need help deciding what path to take forward, it’s time to fill out our online contact form or give us a call: (414) 271-4550.

Preparing for Bankruptcy: What Documents To Bring To Your First Appointment

Filing for personal bankruptcy is a simple and straightforward process if you do some work to prepare before showing up at the courthouse. Below is a list of documents we ask all of our clients to work on pulling together before we file their case.

  1. A certificate of credit counseling from a credit counseling agency approved by the Eastern District of Wisconsin. You must complete a credit counseling course not more than 180 days before filing for bankruptcy.
  2. A copy of every pay stub (proof of each pay period) you have received over the past
    seven months. Your employer should be able to provide you a copy of your pay stubs if you do not already have them.

If you have other income, write or type up a list describing it. Include any cash payments you have received.

  1. The complete and current address of all of your creditors (the people/companies to whom you owe money), including account number, the approximate amount you owe each of them, and the approximate date(s) you incurred each debt.

If a creditor has recently sent you a notice directing where notices should be sent in the event you file a bankruptcy, then you also need to provide us with that notice.

  1. Copies of state and federal tax returns for the 2 most recent tax years. If you have not filed tax returns for both of the 2 most recent tax years, then provide us with a copy of the tax return for the most recent year in which you did file.
  2. The state and federal tax returns for the most recent tax year for any business in which you hold an ownership interest (you do not need to provide us with tax returns for publicly traded companies in which you hold stock and in which you are not also an officer).
  3. A copy of the most recent real estate tax bill listing the tax assessed value for each parcel
    of real estate in which you have an interest. For properties in the City of Milwaukee you can get that information by clicking here. For information on properties in other Wisconsin counties, click here.
  4. A copy of each recorded mortgage or recorded land contract on property in which you have an interest. You will likely have to visit the county courthouse for the county in which each property is located to get this information. Click here to see the addresses and official phone numbers of all the courthouses in the state.
  5. The recorded deed to each parcel of real estate in which you have an interest. This information is also available at the county courthouse in the county where the property is located.
  6. A copy of the title to each automobile on which your name(s) appears.
  7. A copy of the Vehicle Purchase and Finance Agreement (the car note) or lease for each vehicle that you are financing through a lender or leasing.
  8. A written/typed list of the name, address, and phone number of everyone to whom you owe a domestic support obligation (includes alimony, maintenance, or child support). Also include the amount you owe, the amount of any arrearage, and the amount of the monthly payment. If an Order has been entered with the court outlining your obligations, please provide a copy of the Order.
  9. A copy of any divorce decree entered within the last four years, or a divorce decree entered at any time if the property division has not been completed between you and your ex-spouse.
  10. A copy of any marital settlement agreement (“MSA”) if divorced in the last twelve (12) months
  11. Any marital property agreement (“MPA”) between yourself and your spouse.
  12. A written or typed description of any personal injury or worker’s compensation claim you may have and a copy of all accident reports related to the claim, a written or typed estimate of the value of the claim, and the name of the attorney(s) who represents you regarding such claim.
  13. Copies of bank statements from all bank accounts you, and/or your spouse if applicable, have used for the last six months.
  14. A copy of each promissory note secured by real estate you own, including your home. The promissory note is the document that states the amount borrowed, interest rate, installment payment amount, and due date of the loan. Your lender(s) should be able to provide you a copy of this information if you do not have it on hand.
  15. A copy of your social security card. If it is a joint filing, we will need a copy of your spouse’s social security card as well.
  16. Any other documents you think are relevant.

Click here to download a .pdf checklist of these documents that you can print and use to organize your files.

Sometimes it can be tricky to track this information down, so if you have any trouble, please reach out to our office and let us know.