Analysis: Repeat Corporate Bankruptcies in U.S. Hit Fastest Pace Since 2020​​​

Over the past two years, more than 60 companies have filed for bankruptcy for a second or even a third time, according to BankruptcyData. That’s the most over a comparable period since 2020, when pandemic lockdowns shut down vast swaths of the U.S. economy, according to a Bloomberg analysis. With interest rates elevated and some industries stung by shifts swept in by the pandemic, bankruptcies have continued to pile up for particularly hard-hit industries, including real estate companies, casual-dining chains and retailers like Party City. All told, U.S. corporate bankruptcy filings hit a 14-year high in 2024, in the largest single-year tally since the aftermath of the Great Recession, according to data from S&P Global Ratings. Party City used its earlier bankruptcy to cut its debt, close 48 unprofitable stores and renegotiate roughly 450 leases, according to court documents. The business was also taken over by a group of bondholders that includes Silver Point Capital LP, Davidson Kempner Capital Management LP and Capital Research and Management Co. Before the first bankruptcy ended, though, there was a sign that Party City would continue to face trouble when its financial projections forecast a greater-than-expected decline in same-store sales. Similar problems are pressuring other retail chains like mall-based teen apparel shop rue21 Inc., which filed bankruptcy a third time last year to close all its stores and sell its brand, and Eastern Mountain Sports, which also filed bankruptcy for a third time but kept some of its Northeast locations open.

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U.S. Retail Sales End 2024 on a Solid Note​​​

U.S. retail sales increased in December as households bought motor vehicles and a range of other goods, pointing to strong demand in the economy and further reinforcing the Federal Reserve's cautious approach to cutting interest rates this year, Reuters reported. The report from the Commerce Department on Thursday prompted economists to upgrade their economic growth estimates for the fourth quarter to just shy of the July-September quarter's brisk pace. Retail sales rose 0.4% last month after an upwardly revised 0.8% gain in November, the Commerce Department's Census Bureau said. Retail sales increased 3.9% year-on-year in December. Sales at auto dealerships rose 0.7% after accelerating 3.1% in November. Receipts at furniture stores increased 2.3%, while those at clothing retailers rebounded. Sporting goods, hobby, musical instrument and bookstore sales jumped 2.6%.

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Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

U.S. Weekly Jobless Claims Increase, Though Labor Market Conditions Still Healthy​​​

The number of Americans filing new applications for unemployment benefits increased more than expected last week but remained at levels consistent with a healthy labor market, Reuters reported. Initial claims for state unemployment benefits rose 14,000 to a seasonally adjusted 217,000 for the week ended Jan. 11, the Labor Department said on Thursday. Nonfarm payrolls increased by 256,000 jobs in December while the unemployment rate dropped to 4.1% from 4.2% in November. The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 18,000 to a seasonally adjusted 1.859 million during the week ending Jan. 4, the claims report showed.

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Tech Groups Sue CFPB to Block Rule on Payment Apps, Digital Wallets​​​

Two technology trade groups sued the U.S. Consumer Financial Protection Bureau on Thursday to block a new rule giving the regulator supervisory authority over payment apps and digital wallets from large nonbanks, Reuters reported. NetChoice and TechNet said that Congress did not give the CFPB free rein to aggressively, arbitrarily and capriciously police large nonbanks offering consumer financial services through such products as Apple Wallet, Google Pay and Venmo. The trade groups also said the CFPB identified no consumer risks or gaps in regulatory oversight that justified the rule, which covers companies that process at least 50 million transactions annually and more than $13 billion overall. According to the complaint filed in Washington, D.C., federal court, "The bureau failed to show what consumer risks the rule was even meant to alleviate in its haste to dream up a problem in search of a solution." In announcing the final rule on Nov. 21, the CFPB said it would help give consumers who use big technology companies for processing payments the same protections against fraud, privacy violations and account closures they enjoy at banks.

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Trump's New SEC Leadership Poised to Kick-Start Crypto Overhaul​​​

Top Republican officials at the U.S. Securities and Exchange Commission are poised to begin overhauling the agency's cryptocurrency policies potentially as early as next week, when President-elect Donald Trump takes power, Reuters reported. Among the measures commissioners Hester Peirce and Mark Uyeda are weighing are initiating the process that would ultimately lead to guidance or rules clarifying when the agency considers a cryptocurrency to be a security, and reviewing some crypto enforcement cases pending in the courts. Paul Atkins, Trump's crypto-friendly pick for SEC chair and a former agency commissioner, is widely expected to end a crypto crackdown led by President Biden's Democratic SEC chair, Gary Gensler, but it is unclear when the Senate will confirm him. Gensler has said that he will step down on Jan. 20 when Trump is sworn in.

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USTP Updates Section 341 Meeting of Creditors Webpage​​​

The U.S. Trustee Program (USTP) has revamped its Section 341 Meeting of Creditors webpage and released a series of videos to help consumer debtors and their attorneys navigate the § 341 meeting of creditors, a required step in every bankruptcy case. The meeting is conducted by the case trustee — almost always virtually, by Zoom videoconference — to question the debtor under oath about the debtor’s bankruptcy paperwork. The trustee may also ask about the debtor’s property, debts, income and expenses. Creditors may join the meeting and ask questions, too. Visit the USTP’s new Section 341 Meeting of Creditors webpage for more information.

Tenth Circuit Accepting Applications for Bankruptcy Judge Vacancy in Utah​​​

The U.S. Court of Appeals for the Tenth Circuit is seeking applications for a bankruptcy judgeship in the District of Utah. Bankruptcy judges are appointed to 14-year terms pursuant to 28 U.S.C. § 152. The position is located in Salt Lake City and will be available July 1, 2025, pending successful completion of a background investigation. The current annual salary is $223,836. Go to https://ca10.uscourts.gov/hr/jobs to view the position requirements and download the application. The deadline for applications is Wednesday, January 22, 2025.

INSOL International Looking for Candidates to Fill CEO Vacancy​​​

INSOL International, a cross-border nonprofit organization and catalyst for a wide range of ancillary groups representing the judiciary, regulators, lenders and academics, is looking for candidates to fill its Chief Executive Officer (CEO) vacancy. The position will play a key role in shaping the future of INSOL International by implementing the organization’s strategy, delivering initiatives, and expanding its influence and membership. For more information on the position and to submit an application, please click here.

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

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