BY Richard Summerfield
Commercial bankruptcy filings in the US increased by 48 percent in May from earlier in the year, according to the American Bankruptcy Institute (ABI).
Chapter 11 filings rose 28 percent in May from April, the ABI said, citing data from Epiq Systems. May saw a number of notable filings, including major retail chains such as J.C. Penney and Neiman Marcus.
“Companies that tried to shore up their balance sheets at the beginning of the year represent the initial wave of Chapter 11s due to the economic crisis brought about by the COVID-19 pandemic,” said Amy Quackenboss, executive director of the ABI. “The CARES Act and other swift government measures have been successful in keeping consumers afloat during the crisis. As this relief runs its course, however, mounting financial challenges may result in more households and companies seeking the shelter of bankruptcy.”
May’s commercial Chapter 11 filings represented a 29 percent increase from the 562 filings in April 2020. Total commercial filings were up 12 percent over the April 2020 commercial filing total of 2293. Total bankruptcy filings in May represented a 4 percent increase over the 38,444 total filings recorded the previous month. Total non-commercial filings for May represented a 3 percent increase from the April 2020 non-commercial filing total of 36,151.
The average nationwide per capita bankruptcy filing rate in May was 1.98 (total filings per 1000 per population), a decrease from the 2.09 filing rate during the first four months of the year. Average total filings per day in May 2020 were 1998, a 36 percent decrease from the 3130 total daily filings in May 2019.
There were 39,969 total bankruptcy filings in May, down 42 percent from the 68,860 total filings in May 2019. Total consumer filings decreased 43 percent in May, as the 37,391 filings fell from the 65,302 consumer filings registered in May 2019.
News: May Commercial Chapter 11s Increase 48 Percent over Last Year, Total Filings Down 42 Percent