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July Commercial Chapter 11s Down 13 Percent from Last Year, Total Filings Decrease 5 Percent

Submitted by jhartgen@abi.org on

Alexandria, Va. — There were 212 commercial chapter 11 filings registered in July 2022, a decrease of 13 percent from the 245 filings in July 2021, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. Overall commercial filings decreased eight percent in July 2022, as the 1,592 filings were down from the 1,723 commercial filings registered in July 2021. Small business filings, captured as subchapter V elections within chapter 11, decreased three percent to 104 in July 2022 from 107 in July 2021. Total bankruptcy filings were 30,848 in July 2022, a five percent decline from the July 2021 total of 32,399. Noncommercial bankruptcy filings totaled 29,256 in July 2022, also registering a five percent decrease from the July 2021 noncommercial total of 30,676.

“New bankruptcy filings slowed in July, including chapter 13 cases which have been on a steady increase so far this year”, says Chris Kruse, senior vice president of Epiq Bankruptcy. “We continue to monitor closely the impact of new variants of the COVID-19 virus, historically low unemployment rates, and fears of difficult economic times ahead, which lead us to anticipate an increase in bankruptcy filings as we exit the summer.”

July’s commercial chapter 11 filings decreased 53 percent from the 449 filings in June 2022. The commercial filing total represented a 15 percent decrease from the June 2022 commercial filing total of 1,878. Subchapter V elections within chapter 11 increased seven percent from the 97 filed in June 2022. July’s total bankruptcy filings represented a four percent decrease when compared to the 32,182 total filings recorded the previous month. Total noncommercial filings for July represented a three percent decrease from the June 2022 noncommercial filing total of 30,305.

“In addition to global supply and inflation concerns, rising interest rates pushing overall borrowing costs higher could leave financially distressed consumers and businesses in a precarious economic position,” says ABI Executive Director Amy Quackenboss. “Bankruptcy provides refuge for struggling families and businesses looking to establish a financial fresh start.”

ABI has partnered with Epiq Bankruptcy to provide the most current bankruptcy filing data for analysts, researchers, and members of the news media. Epiq Bankruptcy is the leading provider of data, technology, and services for companies operating in the business of bankruptcy. Its new Bankruptcy Analytics subscription service provides on-demand access to the industry’s most dynamic bankruptcy data, updated daily. Learn more at https://bankruptcy.epiqglobal.com/analytics.

About Epiq Bankruptcy

Epiq Bankruptcy is a division of Epiq, a global technology-enabled services leader to the legal services industry and corporations that takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com. 

About ABI

ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events

Article Tags
Consumer Bankruptcy
Business Reorganization
Covid19
Bankruptcy Code
361
506
1129
Topics
Covid19
Real Estate

After Enduring a Pandemic, Small Businesses Face New Worries

Submitted by jhartgen@abi.org on

After two years of shutdowns and restrictions due to the COVID-19 pandemic, small businesses are straining to keep up with price increases without losing customers to larger competitors, the New York Times reported. They are struggling to keep positions filled as competition for workers remains at a fever pitch. And just at the moment that many business owners begin to recover and shore up their depleted savings, they’re worried that the Federal Reserve’s medicine for inflation will bring fresh hardship: higher borrowing costs and timid consumers. Surveys show that small-business sentiment has taken a markedly pessimistic turn in recent months — even more so than that of professional forecasters and corporate executives. In June, the National Federation of Independent Business measured its lowest reading ever for economic expectations. The nonprofit Small Business Majority, in a survey in mid-July, found that nearly one in three small businesses couldn’t survive for more than three months without additional capital or a change in business conditions. The U.S. Chamber of Commerce’s Small Business Index for the second quarter showed that inflation had skyrocketed to the top of owners’ concerns. Seventy-five percent of participants in Goldman Sachs’s small-business coaching program reported that higher costs had impaired their finances.

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Small Business
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Journal Issue
Oct 2022
Bankruptcy Code
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Financial Advisors
Valuation
Covid19

U.S. Housing Market Could Be Headed for ‘Meltdown,’ Economist Warns

Submitted by ckanon@abi.org on
The U.S. housing market could be on the verge of a “meltdown,” an economist warned following the release of data showing a collapse in homebuilder confidence in July, the New York Post reported. Homebuilder confidence plummeted 12 points to 55 in July, according to data from the National Association of Home Builders/Wells Fargo Housing Market Index. Sentiment has declined for seven straight months and is now at its lowest level since May 2020 — with more trouble potentially ahead for homeowners. “Homebuilders have been in denial about the extent of the drop in demand, despite mortgage applications falling by more than a quarter over the first half of the year, with no end in sight to the decline,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “Now, they are acknowledging reality.” The National Association of Home Builders noted confidence within the housing market has sagged due to the impact of high inflation and rising interest rates that have resulted in “dramatically slowing sales and buyer traffic.” The mortgage rates have compounded difficulties from would-be buyers who have to balance long-term loan commitments against exorbitantly high home prices that surged during the COVID-19 pandemic.
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Mortgage
Covid19
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Los Angeles Medical Center Urged to Reopen

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Though it was purchased in April 2020, Los Angeles based-St. Vincent's Medical Center still remains closed, the Los Angeles Business Journal reported. The city's oldest hospital, encompassing five buildings and 674,000 square feet, has only briefly served as an overflow campus for COVID-19 patients since it was purchased more than two years ago. St. Vincent's originally closed in January 2020 following ongoing financial struggles leading to bankruptcy. Billionaire bioscientist Patrick Soon-Shiong, MD, purchased the hospital for $135 million in April 2020, claiming the facility would be used as a "premier [COVID-19] research center." "The calls to reopen the vacant St. Vincent Medical Center are getting louder, and rightfully so," Westlake Councilmember Mitch O'Farrell said in a statement after he introduced a resolution urging the state to purchase or lease the hospital so it can reopen. Dr. Soon-Shiong has enlisted the help of Chicago-based real estate firm Jones Lang LaSalle to find new potential tenants for the site. It remains unclear if the site will remain a full-service hospital once a tenant is found.
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Health Care
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The World Economy Is Imperiled by a Force Hiding in Plain Sight

Submitted by ckanon@abi.org on
This past week brought home the magnitude of the overlapping crises assailing the global economy, intensifying fears of recession, job losses, hunger and a plunge on stock markets, The New York Times reported. At the root of this torment is a force so elemental that it has almost ceased to warrant mention — the pandemic. That force is far from spent, confronting policymakers with grave uncertainty. Their policy tools are better suited for more typical downturns, not a rare combination of diminishing economic growth and soaring prices. Major economies including the U.S. and France reported their latest data on inflation, revealing that prices on a vast range of goods rose faster in June than anytime in four decades. Those grim numbers increased the likelihood that central banks would move even more aggressively to raise interest rates as a means of slowing price increases — a course expected to cost jobs, batter financial markets and threaten poor countries with debt crises. The specter of slowing economic growth combined with rising prices has even revived a dreaded word that was a regular part of the vernacular in the 1970s, the last time the world suffered similar problems: stagflation. Most of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of COVID-19 and its attendant economic shock, even as they have been worsened by the latest upheaval — Russia’s disastrous attack on Ukraine, which has diminished the supply of food, fertilizer and energy. It was the pandemic that prompted governments to impose lockdowns to limit its spread, hindering factories from China to Germany to Mexico. When people confined to home then ordered record volumes of goods — exercise equipment, kitchen appliances, electronics — that overwhelmed the capacity to make and ship them, yielding the Great Supply Chain Disruption. The resulting scarcity of products pushed prices up. Companies in highly concentrated industries from meat production to shipping exploited their market dominance to rack up record profits.
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Consumer Debt
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