Last month’s economic indicators revealed that demand for industrial and commercial products will not be reviving any time soon. Market analysts have predicted that many companies will likely succumb to debt in the first quarter of 2009 as large bonds come due. It was no surprise, then, when Umbrella Corporation announced yesterday that it would enter Chapter 7 bankruptcy. Umbrella leveraged its assets hard in the mid-nineties when it acquired several chemical and biotech companies in North American and Europe. It was poised to become the dominant biotech company in the world before the virus scandal in Raccoon City, USA sent its stocks through the floor. In the aftermath, Umbrella refocused its efforts on consumer products, but it could not remove the stigma attached to its name. The company limped along by selling capital and borrowing heavily until last week, when its largest debts matured. Creditors assessed the viability of Umbrella and deemed that “the likelihood of sufficient investment recapture is too low to recommend keeping the company solvent.” A written statement by Albert Wesker, Umbrella’s vice-president of public relations, conveyed the corporation’s disappointment that it could not gain the public’s trust. “We have consistently dedicated ourselves to serving the best interests of humanity. Mistakes were made, and we acknowledged and corrected them. Under better economic circumstances, we would press more vigorously remain solvent. However, our best option now is to liquidate and then resurrect ourselves at an indeterminate point in the future.”



The fall of Umbrella Corporation comes on the heels of a massive bailout package that was given to rival company Abstergo Industries. Abstergo competed with Umbrella in key markets and suffered a similar drop in contracts from reduced consumer spending. Abstergo benefited from a more diversified portfolio, with products ranging from cosmetics and baby products to airline parts and munitions. Last fall, Abstergo CEO Mark Farrier came before Congress and requested government money to keep the company afloat. Not doing so, Farrier warned, “could send ripples throughout the world’s economies. Those ripples would compound the current crisis and threaten the possibility of every developed nation’s recovery.” Lawmakers protested at first, citing that the Troubled Assets Relief Program was designed to prop up the financial sector. Farrier successfully lobbied for an exemption for Abstergo by demonstrating that the company’s fate is intertwined with the world’s economy. Umbrella Corporation sought a similar exemption, but Congress refused. Senator Dominic Greene (D-NY) scoffed, “If we grant Umbrella an exemption, we might as well offer one to Enron while we’re at it. The American government is not in the business of raising businesses from the dead.”

There is no definite word yet about how Umbrella’s collapse will impact the economy at large. Some analysts have suggested that the company’s overall significance is too low to affect things much. “Ten years ago, this would have crippled the biotech market,” says Karen Haversham of Citigroup. “But ever since the Raccoon City incident, other companies have risen to take over Umbrella’s market share. We won’t miss what little competition Umbrella Corporation had to offer.” Others, including CDC researcher Warren Nolin, believe that the company’s financial troubles will create unforeseen problems elsewhere. “Umbrella is still under investigation for possible links to biological weapon development and distribution. If they are liquidated, we’ll have an even harder time tracking their assets and personnel. Any dangerous materials they may possess could easily find their way into the hands of countless foreign entities or terrorist organizations unaccounted for. We are urging the Attorney General to freeze any legal motions until investigators can adequately inventory Umbrella’s holdings.”