Wakanda Punishment is this? — Part 1: Is Bankruptcy the Ultimate Punishment or Protection for Entrepreneurs?
You probably have watched Black Panther, right? Well, if it wasn’t for the possibility of bankruptcy being an option for businesses and individuals, our viewing pleasure would be very different today. None of us would enjoy the creative Marvel Comics universe, which was brought to life by its co-creator and business owner, Stan Lieber (Lee). There would be no Utopian technocratic African kingdom (Wakanda) to affirm some of us ;). There would be no Black Panther and no awesome warrior princesses! Actually, there would also be NO: Fantastic Four, Thor, Iron Man, X-Men, Spider-Man, The Hulk and The Avengers! Imagine the drudgery of living in such a world?! I shudder to think. However, many years ago, the co-creator of Marvel comics Stan Lieber, reached the depressing decision to file for bankruptcy. Fast forward through the dark days, and somehow he made it through to the other side. Today we enjoy so many Marvel comics and movies.
Movies like Black Panther, not only breaking blockbuster records but stirring up a pride among people of African descent worldwide. For Stan Lee, it appears bankruptcy turned out to be a reset button of sorts, for him.
Here in Malawi, about 2 to 3 weeks ago from today, a Malawian businessman committed suicide. He owed about 6 million Malawi Kwacha (in total) to 3 people, according to Zodiak Broadcasting Station’s news headline. One of the three people he owed decided to take him to court (unsurprisingly) and after a level of stress and anxiety that we can only imagine, he took his own life. As I do not have details beyond that of the radio news headline, one can only wonder if he had the presence of mind to consider other options that could have been at his disposal. I can’t find an online source for this headline that I literally heard over the radio no matter how much I searched. However, I did find this of a 25-year-old entrepreneur who resorted to suicide because of financial problems in his business. The sadder reality is, these are not isolated cases. The tragedy of it all this is that other options may have appeared almost as defeating.
This article will look at bankruptcy and why it is an important option for entrepreneurs to consider when they feel like they are completely out of options. Additionally, we will discuss why it is a good avenue for policymakers in Africa to revise towards better insolvency policies. Fun fact, I once toyed with the idea of filing for bankruptcy when I was about 21 years old and abroad. A “million years later” now, and I realize that my then financial issues were not yet at the “filing for bankruptcy” level.
What is Bankruptcy?According to the FreeDictionary.com, it is:A legal declaration that one is unable to pay one’s debts and thus needs to have debts forgiven or reorganized. That is, bankruptcy is a legal proceeding in which a person or corporation has become insolvent, and therefore cannot pay his/her/its obligations.
Bankruptcy is considered by many, the epitome of business failure. As discussed previously, our business’ wellbeing is often our wellbeing (as entrepreneurs). I can completely understand why some have made fatal decisions. The stress can be all-consuming at its very worst. However, what research seems to show is that the belief that “bankruptcy is the epitome of business failure” is more of the mindset in Africa. In other regions and countries, especially the United States of America, it appears that bankruptcy allowed many entrepreneurs to re-calibrate and start again, often surpassing their previous successes.
Allow me to introduce you to some of the most popular:
- Stan Lieber of Marvel Comics mentioned above filed for US Chapter 11 bankruptcy protection in 2000 and great success came after.
- You’ve probably tried Heinz Baked beans or their delicious Tomato sauce? Well, it’s owner Henry J Heinz had to file for bankruptcy in his first business. His second one which we know today as H. J. Heinz Company flourished as now a billion dollar company.
- Then there’s the company that almost defined my childhood: Walt Disney! It’s founder, Walt Disney created movies that many of us will forever love, like The Lion King, The Little Mermaid, Aladdin, Snow White, Bambi, Toy Story and many others. Some of you more sophisticated types can pretend to not know what I’m talking about but deep down inside you know the Lion King was epic! :) Let’s also not forget the commercial success of the theme parks and merchandise. Walt Disney built one of the most beloved businesses in the world. Period. Ask any child that watches movies, they’ll tell you I’m right. Anyways, Walt Disney too survived bankruptcy.
- Henry Ford who built one of the most well known car brands in the world, went bankrupt on his first business having produced only 20 cars (in 1899–1901). Eventually, he bounced back with a new business he creatively ;) called “Henry Ford Company” and developed the Model T Ford in 1908. His efforts helped make motor vehicles more financially accessible for ordinary people with his assembly line manufacturing systems.
I could go on and on and talk about the founder of General Motor and Chevrolet (this story doesn’t end well), William C. Durant. Additionally, we could talk about the chocolatier, Milton S. Hershey who ran his business for 6 years and despite desperate attempts at saving it, went bankrupt in 1882. Thank goodness for the US bankruptcy acts not being a kiss of death because eventually he rebounded and ended up exercising great philanthropy with his fortune of over $60 Million. We could even mention the current sitting president of the United State of America who had been bankrupt 6 times, firstly in 1991. In some African countries like Malawi and Nigeria having been bankrupt means you can never sit for public offices, among other things. Imagine what this law would have done for the USA? Thought provoking, isn’t it? You may not be a fan of President Donald Trump (who has been bankrupt 6 times), so perhaps you may feel more softened by the fact that other prominent people like the US’s former president Abraham Lincoln and Thomas Jefferson both had to resort to bankruptcy to get a hold of their financial situations after serving public office. Though not ideal, they came out the other side. You may be asking: Why aren’t there any African entrepreneurs on this list, Mac? I scoured the internets for positive stories of African entrepreneurs overcoming bankruptcy and found not a single raving success. It is possible there are some but the stigma is real. I did find this almost positive (bad sad) story about one former banker and entrepreneur in Kenya who found peace after bankruptcy.
Anyway, we are not done here, please read Part 2 (the conclusion) here.
What are your thoughts? Please leave a comment below.
Want to discover more about Maclean Mbepula? Find her on Linkedin or here on Medium. She’s written 3 books (one in entrepreneurship from a grassroots perspective (“Challenge Accepted) and 2 poetry books which are available for purchase on Amazon or you can sign up and get the kindle versions 100% FREE.
Originally published at https://www.linkedin.com.