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The impact of the coronavirus (COVID-19) pandemic on the global economy has been considerable. Though there has been a rise in the number of corporate bankruptcies since the pandemic began – in the US, for example, the number of Chapter 11 filings with greater than $10m of liabilities grew by 16.5 percent in 2020 – government support measures largely kept the number down.

In the US, the Federal Reserve Board’s consecutive interest rate cuts stimulated credit markets and provided near-term relief to companies. More direct support was provided through the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

But as the first green shoots of recovery begin to emerge, following the breakneck speed at which effective vaccines have been developed, government support measures will be rolled back.

While uncertainty remains regarding the economic outlook, removal of governmental support may well release a wave of insolvencies in the second half of 2021. A backlog of ‘normal run-rate’ insolvencies from 2020 will surely filter through.

Industries such as automotive, retail and food service are likely to be the hardest hit. As the year progresses, many companies will have to service new debt and address weakened balance sheets through financial restructurings.

Against this backdrop, Financier Worldwide turns to some of the leading lights in their field, who share their stories…

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