Bankruptcy Trends

Bankruptcy law specialists Wendy Simkulak, Esq. and Lawrence Kotler, Esq. both of Duane Morris, LLP discussed the current state of corporate bankruptcies and what can be expected for the remainder of 2017 and into 2018 during the latest offering of RMA’s Credit Risk Management Audio Conference Series.

In 2016, there was a 26% increase in corporate bankruptcy filings, following a four- to five-year stretch of a relatively flat number of filings. Energy companies drove the increase. In fact, the five largest bankruptcy filings in 2016 belonged to energy companies.

Thus far in 2017, the number of filings has remained relatively flat, and is expected to stay that way through Q4 and into 2018. However, with the probability of rising interest rates and lower quality corporate debt that is still outstanding, Simkulak and Kotler suspect public company filings may increase in 2018.

The sectors with the most filings in Q3 2017 include:

  • Small business with 87% of the filings.
  • The service industry with 25%.
  • Finance and real estate with 18%.
  • Retail with 16%.
  • Manufacturing/construction each with 9% of the filings.

Through the third quarter, 16 energy companies and 54 public companies filed for bankruptcy.

Join us for the next installment of the Credit Risk Management Audio Conference Series on December 12, Cloud Computing Opportunities for Community Banks.

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