National Business Bankruptcy Filings Decline in August
According to the Wall Street Journal’s Daily Bankruptcy Review, data from U.S. bankruptcy court records show that commercial bankruptcy filings declined in August by five percent from the previous month.
Business bankruptcy filings in August totaled 6,950, compared with 7,299 commercial bankruptcy filings in July, which was the first month since March that saw an increase in commercial filings.
American Bankruptcy Institute executive director Samuel J. Gerdano said that the decline in business bankruptcies could be credited to lenders holding off on taking any action against defaulting borrowers while the economy remains uncertain. More lenders are negotiating with borrowers to restructure debt or extend payment timelines.
During the first six months of 2010, the number of companies filing for Chapter 11 reorganization fell by 17 percent compared with the same period last year. The number of businesses filing Chapter 7 liquidation bankruptcy was about the same as 2009.
However, the ABI’s Gerdano warned that the decline in business bankruptcy filings should not be considered a sign of commercial economic recovery. He said that “there is a sense that something is coming” – although whether it is a tidal wave or a ripple is yet to be seen.
Greg Gilbert
Keith Maynard
