Slipping Beneath The Bottom Line

Both were leaders in their fields. But in back-to-back reversals of fortune, Wang Laboratories and Phar-Mor took refuge from their creditors in Chapter 11 of the U.S. bankruptcy code. Wang, whose word processors led the charge into office automation in the 1970s, said it would lay off 5,000 of its remaining 13,000 workers. The Massachusetts-based company had been piling up losses for years after missing out on the personal computer revolution. Big losers included the family of the late An Wang, who founded the company in 1951. From a peak of $1.6 billion, the family's stock dwindled in value to $50 million before the Chapter 11 filing. "We simply ran out of time," said Wang chairman Richard Miller, who arrived from General Electric in 1989 to try to rescue the company. Miller said the firm will now focus on providing software and services.

Phar-Mor, the largest and fastest-growing U.S. deep discount drugstore chain -- with 306 stores in 33 states -- sought bankruptcy court protection after firing president Michael Monus and chief financial officer Patrick Finn and taking a $350 million write-off. The company claimed that Monus and Finn embezzled $10 million and overstated profits, then sued its accountants, Coopers & Lybrand, for failing to spot the fraud. Coopers countersued, accusing Phar-Mor executives of providing false and misleading figures to audit.

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