USPS Heading Towards Bankruptcy

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If the United States Postal Service (USPS) were an ordinary private company, it would have filed for Chapter 11 bankruptcy already. With the massive drop of about 6 billion in mails, especially from first class, they lost about $8.5 billion in the fiscal year ended September. The USPS said it would run out of money in 2011 if Congress doesn’t step in to rescue them in the event the economy does not recover.

The USPS now delivers some 170.6 billion pieces of mail per year. Contributions of about $5.4 billion towards pre-fund retiree health benefits and another $2.5 billion to the government’s workers’ compensation insurance scheme also led to the poor financial performance. Because USPS is a quasi-government organization, it has workers’ compensation obligations to help fund four major disability compensation programs.

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Published In: Bankruptcy Updates, Business Organization Updates, Worker’s Compensation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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