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Nearly a year since coronavirus-related shutdowns began affecting large swaths of the American economy, more businesses are filing for bankruptcy as court records show that chapter 11 filings were up nearly 20 percent in 2020 compared with the previous year, the Washington Post reported. Data on a subset of businesses ― those registered as corporations ― shows that some sectors are faring much worse than others, with restaurants, retailers, entertainment companies, real estate firms and oil and gas ventures filing for protection in far greater numbers than in previous years, according to New Generation Research. Bankruptcies filed by entertainment companies in 2020 nearly quadrupled, and filings nearly tripled for oil and gas companies, doubled for computer and software companies and were up 50 percent or more for restaurant owners, real estate companies and retailers, compared with 2019, data from the research firm shows. Among those industries most affected, there were 5,236 chapter 11 filings in 2019 but 6,917 last year, a tally at least 30 percent higher than any of the previous four years. Because bankruptcy filings lag other signals of economic distress, experts say the worst may be yet to come. Bankruptcies stemming from the 2007 financial crisis didn’t peak until 2010. “Bankruptcies don’t cause damage to the economy," said Ed Flynn, a consultant to the American Bankruptcy Institute. "The damage has already occurred when the bankruptcy is filed. Higher bankruptcies are more a symptom of economic harm than the cause.” Read more.

Be sure to read Ed Flynn's exclusive analysis of weekly filing trends on ABI's COVID-19 Resources website.

Senate Democratic Whip Dick Durbin (D-Ill.), Chair of the Senate Judiciary Committee, and U.S. Senator Chuck Grassley (R-Iowa), Ranking Member of the Senate Judiciary Committee, yesterday introduced the COVID-19 Bankruptcy Relief Extension Act, bipartisan legislation to temporarily extend COVID-19 bankruptcy relief provisions enacted as part of the March 2020 CARES Act and December 2020 omnibus appropriations bill. The bill would extend for an additional year CARES Act bankruptcy provisions that are set to expire on March 27, 2021. Click here to read the full press release on the legislations provisions.

Get the insight, analysis and statistics you need on the Small Business Reorganization Act and subchapter V elections by visiting ABI’s SBRA Resources website.

Despite a last-minute pardon by former President Donald Trump in his criminal case, tech pioneer Anthony Levandowski's legal woes continue after he was forced to file for bankruptcy protection on the same day he was ordered to pay Google $179 million in a contract dispute last year, FreightWaves reported. Uber Technologies, Inc. is now taking issue with the proposed terms of his bankruptcy, claiming he used "legally dubious techniques to shelter his wealth from creditors," according to an Ars Technica article published earlier Thursday. "I continue to view many of the transactions in which Levandowski engaged immediately prior to the filing of this bankruptcy case with an incredibly jaundiced eye," U.S. Bankruptcy Judge Hannah Blumenstiel said on a phone conference last week, the news outlet reported. Levandowski filed for chapter 11 bankruptcy protection on March 4, 2020, in the U.S. Bankruptcy Court for the Northern District of California. Levandowski's attorney, Neel Chatterjee of Goodwin Proctor LLP, told FreightWaves at the time. He listed $50 million to $100 million in assets, compared with $100 million to $500 million in liabilities, according to the filing. Between 2016 and 2017, Levandowski received $127 million for his work on autonomous vehicle technology at Google. Uber claims in court filings that he "immediately put in motion an elaborate scheme to shield his assets from creditors."