Pace of Chapter 7, 11 filings accelerates |
A new report from Cornerstone Research has found that 117 "large" companies, with $100m-$1bn in assets, made Chapter 7 or Chapter 11 filings over the 12 months to June 30th - 81% above the annual average rate of 44 from 2005 through 2024. The higher pace of bankruptcies began in early 2023 and has remained elevated since then. “Mega-bankruptcies,” or those by companies with more than $1bn in assets, increased to 32 during the studied period, up from 24 in the prior 12 months. In their first-day declarations the largest filers commonly cited factors including reduced demand or increasing costs due to inflation, reduced demand due to consumer preference, market competition or industry factors, increasing operational and financing costs due to high interest rates, and challenges in the regulatory, legal and policy landscape. Manufacturing had the highest share of bankruptcy filings, making up 30% of the total, followed by services at 24%, finance/insurance/real estate at 13%, transportation/communications/utilities at 10%, and retail trade at 10%. |
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