The Malden Mills Case
The Malden Mills Case
By Peter Schiller
Seeing that I live in South Lawrence, MA I thought it would be interesting to analyze this case. I also bring a perspective to this paper as I, like Aaron Feuerstein, am “a strongly religious man” (Nohria and Piper 1-10). The difference there is that he is Jewish, like half of my wife’s family and I am a Christian (reformed Presbyterian to be exact). Thanks to my father-in-law’s extended family, I have some insight into the feeling of social responsibility of the Jewish faith. They tend to be loyal to both family and their community, which may explain some of Feuerstein’s behavior or decision making. (Pava 603-617) The facts of this case are as follows. During the second shift on December 11, 1995 a fire erupted on the Flock department, eventually leading to a fire in the boiler room which led to the rest of the building going up in flames and in two hours, the building collapsed. In total, 24 employees were injured and of those, nine were severely injured. This led to a Chapter 11 bankruptcy filing in November 2001, the second time he had to file for Chapter 11 in his lifetime; the previous time was back in 1981 when fake fur went out of fashion. Feuerstein was assured that he was due around $300 million in insurance to cover his losses (the wages for their employees and the rebuilding). (Martin 3-11) A decision needed to be made on a rebuilding plan: whether it would be a full or partial rebuilding process. Also, they needed to decide on whether or not to lay off most of or just some of their employees during the rebuilding process.
Some of the decisions that were made were as follows. The day after the fire, Feuerstein decided, based upon the assurance of the insurance payout that they would continue to pay all 3,100 of their employee’s full pay, including benefits, for 90 days. Feuerstein decided to rebuild everything, but not only that, they decided to buy top notch equipment. That he would use this negative
By Peter Schiller
Seeing that I live in South Lawrence, MA I thought it would be interesting to analyze this case. I also bring a perspective to this paper as I, like Aaron Feuerstein, am “a strongly religious man” (Nohria and Piper 1-10). The difference there is that he is Jewish, like half of my wife’s family and I am a Christian (reformed Presbyterian to be exact). Thanks to my father-in-law’s extended family, I have some insight into the feeling of social responsibility of the Jewish faith. They tend to be loyal to both family and their community, which may explain some of Feuerstein’s behavior or decision making. (Pava 603-617) The facts of this case are as follows. During the second shift on December 11, 1995 a fire erupted on the Flock department, eventually leading to a fire in the boiler room which led to the rest of the building going up in flames and in two hours, the building collapsed. In total, 24 employees were injured and of those, nine were severely injured. This led to a Chapter 11 bankruptcy filing in November 2001, the second time he had to file for Chapter 11 in his lifetime; the previous time was back in 1981 when fake fur went out of fashion. Feuerstein was assured that he was due around $300 million in insurance to cover his losses (the wages for their employees and the rebuilding). (Martin 3-11) A decision needed to be made on a rebuilding plan: whether it would be a full or partial rebuilding process. Also, they needed to decide on whether or not to lay off most of or just some of their employees during the rebuilding process.
Some of the decisions that were made were as follows. The day after the fire, Feuerstein decided, based upon the assurance of the insurance payout that they would continue to pay all 3,100 of their employee’s full pay, including benefits, for 90 days. Feuerstein decided to rebuild everything, but not only that, they decided to buy top notch equipment. That he would use this negative