While the two companies have had problems for years, until the last few months the favorable credit environment has propped up companies that should have failed earlier. Retail bankruptcies have for years been near record lows. Now, with the legs knocked out from under lending, expect corporate bankruptcies to soar, especially retailers who are also being hit by plummeting consumer confidence after years of aggressively expanding their stores’ footprints.

The WSJ points out that retailers like Kohl’s, Gottschalks, and Bon-Ton Stores saw sales plunge double digits in December, the month retailers make much of their profit:

Bon-Ton, based in York, Pa., is trying to manage a substantial debt load as the retail outlook worsens. It employs about 33,000 at 280 stores across the Northeast and Midwest. In 2006, when money was cheap, it took on more than $1.7 billion in debt to buy 142 former Saks stores from Northern Department Store Group…

Last week, Moody’s lowered the company’s credit rating by one notch, saying that poor consumer traffic over the holidays could force the company to resort to “heavy markdowns.” The ratings agency said that it believes that over the next 12 to 18 months, Bon-Ton’s cash flow “will not be sufficient to cover all of the cash requirements, including the working-capital needs….Bon-Ton has limited alternative sources of liquidity since all of its assets are pledged to the bank facility and mortgage loans.”

The Journal puts the bankruptcies in excellent context on its page one, and makes the NYT’s C3 story look embarrassingly near-sighted, though better than the FT, which ignored the story entirely.

3Com’s purchase by Bain Capital and a Chinese firm fell through after the U.S. government balked at the national-security implications of allowing the latter to own the technology company.

The adorable Brits at the FT headline their story “China fears scupper $2bn deal for 3Com” and say the shoot-down is evidence of rising protectionist sentiment in the U.S. The Chinese would have had a minority stake in 3Com, but the company sells security software to the American government, and despite offers by Bain to spin off that division, a panel that reviews foreign investment declined to support the transaction.

The WSJ frames the story as a bad omen for the deal-making business, which has become more dependent on foreign capital, especially as the dollar has dropped in value. Both it and the FT say the move will have repercussions for U.S. businesses in China.

We say good for the government for putting national security over multinational business interests by blocking the sale of a significant stake in a sensitive technology company to a firm with Chinese military ties.

The Supreme Court ruled workers can sue their employees for screwing up their 401(k) accounts in a unanimous decision that The Washington Post splashes on its page one. The NYT puts it on its business front, but the WSJ, despite dropping it on its personal-finance cover, has the best story.

This case looks like a no-brainer, but it’s still surprising to see this court rule unanimously in favor of workers over their employers, and even more surprising to see the Bush administration celebrate it despite the fact that, as the Post says: “Business advocates predicted the ruling would unleash a raft of lawsuits by employees.”

The FT goes deep with a good analysis of the impact the troubles of the monoline bond-insurer business is having. The salmon-colored fish wrap does a good job of weaving a lot of threads together.

One thing we note in its story is how the language reporters are using to describe what’s happening in our markets is becoming more dire (and, we say, realistic). We’re noticing an up-tick in usage of words like contagion, domino effect, chain reaction, etc.

The Atlanta Journal-Constitution reports that tippers are becoming tightwads, a result of the economic downturn:

Belt-tightening helps waitress Ebony Thomas pay for groceries and other essentials. She used to earn $300 to $500 a week in tips working at the Depeaux restaurant in Decatur. Not anymore.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.