########################################
#Written by David Tam, 1997. #
#davidkftam@netscape.net Copyright 1999#
########################################
David Tam
Wednesday, January 15, 1997.
Business Press Review
=====================
"Sung firm in bankruptcy", The Globe and Mail. Wednesday, January 15, 1997. B16.
------------------
Alfred Sung Collection Inc. has gone into bankruptcy, owing creditors
approximately $1-million, including about $200,000 in secured credit to Hunter
Equity Corp. This has been the second time that the manufacturer has filed for
bankruptcy (1994 was its first time). This event was triggered by Mimran
Group's cancellation of the Alfred Sung licensee agreement. Alfred Sung
acheived annual sales of almost $4-million from its three Toronto retail
outlets and from supplying other retailers such as Holt Renfrew and other
specialty stores in Western Canada.
Many factors could have been involved in the demise of Alfred Sung Inc.;
poor marketing, sales, product quality, perhaps even poor accounting and
financing. Filing bankruptcy for the second time is very rare and also very
embarassing. How could this have happened? I would have thought that
management would have learned their lesson and overcome their past mistakes,
especially when they have been given a second chance.
Here is a possible scenario of the situation. Inadequate accounting and
financing could have played a large role in its downfall. Failure to realize
the seriousness of its current liabilities (accounts payable) and the lack of
current accounts receivable may have caused a problem with cash flow. Unable
to pay their creditors they were forced into bankruptcy again. An examination
of its "statements of changes in financial position" could provide the answers.
(
geocities.com/siliconvalley/campus/9640/2ndYear) (
geocities.com/siliconvalley/campus/9640) (
geocities.com/siliconvalley/campus) (
geocities.com/siliconvalley)