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Bankruptcy Law Blog

Friday, October 4, 2019

Walt Disney Bounced Back From Bankruptcy

Today, Disney is one of the most recognized and admired brands in the world. Last year alone the company generated a total revenue of $59.43 billion. But it was not always the powerhouse it is today. In fact, Walt Disney’s first animation studio declared bankruptcy just a year after opening. 

The House of Mouse’s Humble Beginnings 

After working for the Red Cross in Europe at the tail end of World War I, Walt Disney returned home to Kansas City and got a job in advertising with the Kansas City Film Ad Company. On the weekends, he and his friends would borrow a movie camera from the office and make short films. 

Their first animation, which they called a "Laugh-O-gram," parodied a recent scandal in the Kansas City police department. It was shown at the Newman Theater in Kansas City before the feature film, and it was a hit. 

He began making more of these short, silent Laugh-O-Grams, and their popularity grew. Eventually, he and his friends released an animated version of “Little Red Riding Hood” that so impressed the locals, Disney decided to open his own studio. He got $15,000 in seed capital from investors, and officially opened the doors of Laugh-O-Gram Films, Inc., on May 23, 1922.

He quickly signed an $11,000 contract with a company named Pictorial Clubs to produce a cartoon series, but Pictorial Clubs never paid up. After just over a year in business, Laugh-O-Gram Films went bankrupt, and Disney moved to California in search of a fresh start.

Just a few years later, Disney introduced the world to Mickey Mouse. The beloved character is the foundation of Disney’s global empire. Walt Disney would later say Mickey was inspired by a tame mouse that visited his desk at Laugh-O-Gram. 

Disney Hits a Stumbling Block

Although Disney’s popularity grew, the studio still faced financial difficulties. It turned out creating a whole new genre of films — feature-length animations — was expensive. Pinocchio and Fantasia, which we now consider classics, were box office flops. Then the animators went on strike. These stumbling blocks nearly pushed Disney into bankruptcy a second time. Only slowly did things turn around. 

“It's kind of fun to do the impossible.”

It is difficult not to feel discouraged when you are on the brink of bankruptcy, but it is important to remember you are not the only person who has ever been in financial trouble. Many people have gone before you. Many of them used the bankruptcy process to start fresh and turn things around for good. 

As Walt Disney once said, “It's kind of fun to do the impossible.” If the financial situation you are in is impossible, embrace it. Don’t wait to file for bankruptcy until it is too late to really benefit from the way the law works. It is possible to file and still hold on to your house, your car, and other items that are important to you or improve your quality of life. If you want to know more, please contact our office to schedule an appointment.

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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”