In US, if a top bank screws up, it is deemed too big to fail. No problem, it will be bailed out by the government at taxpayers' expense. Worse still, the CEO will get a big bonus running into hundred million dollars. (This was what happened after the GFC).
Plus, in the US, if you fail repeatedly, they may even make you the president.
Failing is good for the rich.
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Toshiba approves bankruptcy filing in US
E-mail Xinhua, March 29, 2017
Toshiba Corp. on Wednesday approved a Chapter 11 bankruptcy filing in the United States by its embattled Westinghouse Electric unit as the conglomerate is facing a possible 712.5 billion yen (US$6.4 billion) writedown on its failing nuclear energy business and a group net loss of more than 1 trillion yen.
The latest move follows Toshiba saying last month that it was expecting
to write down 712.5 billion yen in losses connected to its nuclear power business with massive deficits attributed to Westinghouse for project delays and negative profit outlooks, as well as dwindling scope for future nuclear business operations.
The bankruptcy filing will potentially allow Toshiba to limit the risk of further deficits and the losses to date will be finalized by the end of the current fiscal year on Friday.
Toshiba acquired Westinghouse in 2006 in a deal worth 5.4 billion U.S. dollars at a time when the U.S. government had unrolled a number of allowances to support nuclear developers.
But increasing
costs for reactors and more stringent safety standards added to Westinghouses difficulties, leading to Toshiba trying to mitigate the damages with the Japanese conglomerate opting to spin-off its top-earning flash memory business in a bid to make up for huge losses and free up funds.
Toshiba at the time said it would sell a stake of less than 20 percent in its flash memory business to ensure its liabilities do not exceed its assets in the current business year.
Toshiba's shares being placed on a "securities on alert" watchlist by the Tokyo bourse in September 2015, following an accounting scandal, which had initially dented the company's reputation, prior to the huge impairment costs, did little to help the firm's unfolding difficulties.
Toshiba's involvement in one of
Japan's largest-ever accounting scandals also did little to help the trouble-hit conglomerate.
Between 2008 and 2014 the multinational conglomerate was
involved in padding its profits by 152 billion yen, leading to its chief, and half of its board resigning. The firm was subsequently fined an unprecedented 60 million U.S. dollars.
Adding to its woes, Toshiba, this year, had to delay the announcement of its earnings report twice, stating that it needed more time to investigate an accounting issue at Westinghouse.
While the firm's NAND-type flash memory business has become a global industry standard, with the memory devices, produced locally, used in technology such as smartphones around the world and estimated to be worth 2 trillion yen, it's nuclear business has failed in a number of areas, both at home and abroad.
Particularly in the wake of the 2011 Fukushima nuclear crisis, Toshiba has been struggling to secure new orders.
Conversely, Toshiba's chip operation booked an operating profit of 110 billion yen on sales of 845.60 billion yen in the fiscal year that ended March 2016. This was at a time when the overall conglomerate logged a group operating loss of 708.74 billion yen.
Toshiba said due to its U.S. nuclear business-related losses, it now expects negative net worth of 620 billion yen at the end of March and a group net loss of 1.01 trillion yen following the bankruptcy filing.
