A number of businesses have come across devastating financial problems lately, especially those in the retail industry. In fact, the number of brand-new Chapter 11 bankruptcy filings in the United States, including in Massachusetts, spiked more than 60 percent year over year this past March, with the number of filings jumping by 299. The filing count jumped to 770 — the highest figure recorded in a month’s time since April of 2011.
In April of 2011, the number of Chapter 11 bankruptcy filings was 789. At that time, many companies were still attempting to recover from the infamous Great Recession. The recent increase of 299 filings this past March is the nation’s second-largest jump year over year for a month since the recession.
Bankruptcy filings are typically low later in the year, for instance, around December. However, this past December, however, filings rose 61 percent from November. The number of Chapter 11 bankruptcies at that time was the highest number for a month since April of 2013.
Companies in Massachusetts or elsewhere can file for this type of bankruptcy in an effort to restructure their debts under a judge’s supervision. The process typically involves a major debt reduction and the transfer of the ownership of a company from its owners to its creditors. The goal is that the company will move forward from bankruptcy with a lot less debt and thus be in a position to keep operating. A bankruptcy attorney can provide a struggling business owner with the guidance needed to navigate the Chapter 11 bankruptcy filing process in the most personally beneficial manner possible.
Source:Â businessinsider.com, “Chapter 11 bankruptcies are up 63% from a year ago“, Wolf Richter, April 10, 2018