With bankruptcies surging, 2020 may become one of the busiest years for Chapter 11 filings since the Great Recession
Twelve midsize to large corporations – all with more than $10 million in debt – filed for Chapter 11 bankruptcy protection during the third week of June, another consequence of the coronavirus pandemic and continued trouble in America’s oil industry.
The filings represent the highest weekly total of the year, and experts believe this is just the beginning of a bankruptcy tsunami that will wash over the country’s largest companies this summer and then drench both smaller businesses and individuals if government stimulus money dries up.
“I very much expect to see the numbers continue to rise” said Ed Flynn, a consultant for the American Bankruptcy Institute, a nonpartisan research organization. “Every day there are more rumors of this or that company, and the rumors are almost never wrong.”
The types of companies affected are unsurprising. Since the start of the pandemic, they have included businesses that consumers have studiously avoided, from rental car companies, restaurants and department stores to gyms and health care companies offering elective surgeries and procedures. The fitness studio chain 24 Hour Fitness Worldwide and AAH holdings, which operates clinics that help clients overcome addiction, were among the latest batch of filers.
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Companies seeking protection from their creditors also include oil and gas producers and suppliers that