The number of businesses seeking chapter 11 protection rose 52% in July from a year earlier as the coronavirus pandemic roiled the economy and upended businesses from coast to coast.
Personal bankruptcy filings were also up, according to legal-services firm Epiq Systems Inc. The upward trend in bankruptcy filings in the U.S. is expected to continue in the coming months as government-funded assistance programs, intended to soften the blow from the coronavirus pandemic, come to an end.
A total of 642 businesses filed for chapter 11 bankruptcy protection from creditors in July. In the first seven months of the year, chapter 11 filings rose 30% from a year earlier to about 4,200, Epiq said based on data from its Aacer business unit.
“The increase in recent bankruptcies is due to a combination of pre-Covid debt levels and the current zero-revenue environment,” said Deirdre O’Connor, managing director for corporate restructuring at Epiq.
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