Become more informed in minutes...

A new report from Cornerstone Research has found that 117 "large" companies, with $100m-$1bn in assets, made Chapter 7 or Chapter 11 filings over the 12 months to June 30th - 81% above the annual average rate of 44 from 2005 through 2024. The higher pace of bankruptcies began in early 2023 and has remained elevated since then. “Mega-bankruptcies,” or those by companies with more than $1bn in assets, increased to 32 during the studied period, up from 24 in the prior 12 months. In their first-day declarations the largest filers commonly cited factors including reduced demand or increasing costs due to inflation, reduced demand due to consumer preference, market competition or industry factors, increasing operational and financing costs due to high interest rates, and challenges in the regulatory, legal and policy landscape. Manufacturing had the highest share of bankruptcy filings, making up 30% of the total, followed by services at 24%, finance/insurance/real estate at 13%, transportation/communications/utilities at 10%, and retail trade at 10%. 

 

CFO

Are Sneaky Renewals Costing You?

Don't let valuable negotiation windows pass you by. Our free contract tracker helps you take control of your renewals, so you can terminate unnecessary services and negotiate for better prices. Seize control of your savings today.

Get the Tool

 

The former chief financial officer of shuttered Silvergate Bank has lost his bid to toss an SEC suit alleging he misled investors about the bank’s financial health following the collapse of FTX. The suit alleges former finance chief Antonio Martino “engaged in a fraudulent scheme to mislead investors about the Bank’s dire condition” after the 2022 bankruptcy of the crypto exchange FTX led to a “bank run and severe liquidity crisis” for Silvergate, according to the complaint. In his 26-page opinion and order, Judge Andrew L. Carter Jr. of the U.S. District Court of the Southern District of New York detailed the CFO’s involvement in two January 2023 presentations highlighting the projected impact of securities sales in the first quarter of 2023. 

 

Bloomberg Law

CFO Dive

Treasury Secretary Scott Bessent has appointed Frank Bisignano to be the chief executive of the IRS, creating a new position to help run the beleaguered tax agency. Mr. Bessent will remain in his role as commissioner of the agency. Mr. Bisignano, currently commissioner of the Social Security Administration, previously served as president and CEO of Fiserv, the world’s largest financial services and payment technology company. He led the 2019 merger of Fiserv and First Data while serving as CEO of First Data. In his new role, he will face the challenges of preparing the agency for the 2026 tax-filing season, and managing it through a government shutdown.

 

CNBC

Reuters

Wall Street Journal

The Institute for Supply Management (ISM) said on Friday that employment contracted in the service sector for the fourth straight month in September, with business activity in the sector as a whole shrinking for the first time since the pandemic. The ISM's index of services declined two points to 50, a level that indicates stagnation, and weaker than all estimates in a Bloomberg survey of economists. Ten services industries reported growth in September, led by accommodation and food services, as well as health care and social assistance. Seven industries contracted. Six industries reported an increase in employment, while eight noted a decrease. Relatedly, S&P Global's September U.S. Services Purchasing Managers' Index came in at 54.2 ,down slightly from 54.5 in August. The reading marks the 32nd consecutive month of expansion and was higher than the forecast of 53.9. “Service sector growth softened slightly in September but remained strong enough to round off an impressive performance over the third quarter a whole," commented S&P Global Market Intelligence chief business economist Chris Williamson. “Growth is being fueled principally by rising financial services and tech sector activity, though we are also seeing more signs of improving demand for consumer-facing services such as leisure and recreation, likely linked in part to lower interest rates. Lower borrowing costs have also fed through to a broad based improvement in business optimism about the outlook for the next 12 months."

 

Advisor Perspectives

Bloomberg

Market Watch

Walmart plans to use sensors to track the location and condition of the 90m pallets of groceries it ships to stores each year. Sensors using Bluetooth connections attached to the pallets will reduce routine work at Walmart, which has been able to increase revenues by $150bn in the past five years without taking on more workers. Walmart executives said last week that the retailer's workforce will stay roughly flat over the next three years. As well as the new pallet-tracking tech, it is deploying artificial intelligence agents to perform an increasing number of functions, including automating the process of complying with accessibility requirements, and modernizing its legacy software code, some of it written decades ago in computer mainframe language.

 

Financial Times

Apple has removed ICEBlock, a popular app that alerts users to the presence of Immigration and Customs Enforcement (ICE) agents, following a request from President Donald Trump's administration. In a statement, Apple said: "Based on information we've received from law enforcement about the safety risks associated with ICEBlock, we have removed it." U.S. Attorney General Pam Bondi indicated that the Justice Department contacted Apple to enforce the removal, citing concerns that the app could endanger ICE agents. Rights advocates have expressed worries about potential infringements on free speech and due process amid the government's aggressive deportation efforts.

 

CNBC

Fox News

New York Times

Reuters

The Securities and Exchange Commission (SEC) is examining alleged ties between Chicago-based start-up Dream Exchange and the Church of Scientology, according to the Wall Street Journal. Investigators are looking into a whistleblower's allegations that the nascent stock exchange misappropriated investor funds and maintained undisclosed links to Scientology-affiliated organizations. The complaint also alleges that Dream Exchange allowed some of its employees, who were Scientologists, to volunteer for the church on company time. Dream Exchange has denied that it misappropriated investor funds. Attorney Dan K. Webb has said that any donations were founder and chief executive Joe Cecala’s own personal matter, and the exchange had no knowledge of them. A representative for the Church of Scientology has said the church doesn’t engage in any business activities. The SEC’s civil investigation into Dream Exchange is in its early stages and might not necessarily lead to any allegations of wrongdoing. 

 

Investment News

Wall Street Journal

Applicable Large Employers (ALEs) are being urged to respond promptly to IRS inquiries regarding noncompliance with reporting requirements. Since 2015, ALEs must provide minimal essential coverage and file Forms 1094-C and 1095-C. Failure to comply can lead to significant penalties, including an employer-shared responsibility payment of $2,000 per full-time employee. Brett Bissonnette, who leads Plante Moran's tax controversy services, advises that ALEs should retain proof of compliance and act quickly when contacted by the IRS. He notes: "If these steps are taken, significant liabilities claimed by the IRS sometimes can be resolved for a fraction of the price of the underlying liability." Compliance with the Affordable Care Act is crucial to mitigate risks of penalties.

 

Bloomberg Tax

Spirit Airlines is set to reduce its fleet by nearly 100 aircraft, almost half of its total, as part of a bankruptcy restructuring effort after a period of financial difficulty. CFO Fred Cromer indicated that the airline's struggles are attributed to industry overcapacity, low demand, and price pressures within the low-cost carrier segment. The airline has filed for Chapter 11 bankruptcy for the second time this year and is actively negotiating with lessors to reject 87 aircraft leases, aiming to save "hundreds of millions of dollars" in costs.

 

Reuters

H&R Block is gearing up for the upcoming tax season by aiming to hire between 60,000 and 80,000 tax pro associates. The available positions include tax pros, office leaders, receptionists, and bookkeepers, with compensation varying based on role, location, and experience. According to some sources, mid-level tax pros can earn over $20 per hour in certain regions. Candidates can apply through a brief application process, and those applying for tax professional roles must complete a tax knowledge assessment. Successful candidates will undergo background checks and receive role-specific training.

 

Accounting Today

Cracker Barrel has cut ties with Prophet, the global marketing firm behind the chain's troubled rebranding campaign. The chain faced intense backlash after unveiling a new logo and redesigned stores that longtime fans said stripped away what they loved most about the brand. The restaurant operator also said that it had eliminated the role of senior vice president and chief restaurant and retail operations officer. Those duties had been held by Cammie Spillyards-Schaefer. Thomas Yun, it said, would return to the company as vice president of menu strategy and innovation, replacing Matthew Banton.

 

Fox News

Market Watch

Wall Street Journal

Asahi Group has restarted its domestic Super Dry beer factories after a cyber attack halted operations. The cyber attack on Monday last week shut down production at the majority of Asahi’s 30 factories in Japan and put the country’s izakaya pubs, supermarkets and convenience stores on the brink of shortages of the highly popular Super Dry beer. Asahi, known for Super Dry beer and Nikka Whisky, said it had no estimate for when its system would be fully restored. It is still confirming the status of its other factories.

 

Financial Times

Japan Times

Reuters

Highlander, a maritime equipment firm, is developing an underwater data centre off Shanghai, aiming to reduce energy consumption for cooling by up to 90%. The project, set to launch in mid-October, will serve clients like China Telecom. Yang Ye, vice-president of Highlander, claims that "Underwater facilities can save around 90% of energy consumption for cooling." While the technology has potential, experts like Shaolei Ren from the University of California, Riverside, caution that significant construction and environmental challenges remain. The project will rely on renewable energy from nearby offshore wind farms.

 

South China Morning Post