The past year or so has been a year full of bankrupt companies on Long Island elsewhere. Many of them, now including Fortunoff, spring from the same general problem: financial liquidity difficulties related to bad housing loans. Some companies, such as American Home Mortgage and Delta Financial, were quite direct victims, particular in connection with failed subprime mortgages.
Then there is another whole class of companies, with Fortunoff among the latest and most prominent, who could be considered "trickle down" victims. Tight money, as well as people losing their houses or ability to pay for anything else hurt the retail environment in general. When the business included items for the homes, such as Fortunoff, the impact grew even larger.
Now the owners of Lord & Taylor are promising to infuse Fortunoff with new cash, but it should be remembered that an investment company, Angelo, Gordon & Co., never even got to the starting gate with an ambitious plan to recapitalize Delta Financial. The root causes were too deep for a quick addition of funds to help.
--Noel Rubinton
Comments (2)
The news that Fortunoff' is in financial trouble is chilling.
The slump in the housing market is not the only sign of problems in our economy. Take notice next time you're on the road; how many high-end --and very likely leased -- vehicles are out there and how few of them are made by domestic companies? Even when manufactured in the U.S., the profits on sales and leases leave our economy when paid to non-US parent companies.
I foresee the next sign of consumers stretching themselves beyond their means will be a flurry of early automobile lease terminations with no buyers in sight.
Americans as a group have become financially irresponsible. The echoes of their poor spending choices have hurt our economy greatly and perhaps irreparably.
I fear its going to get a lot worse out there before it gets better.
Noel,
your article is very deceptive. I don't believe for one minute that you aren't aware of the corrput business practices of American Home Mortgage. And their abuses of borrowers.
Shame on you for printing what you know isn't the truth.