Total commercial Chapter 11 filings in May 2020 increased 48% from May 2019, according to data provided by Epiq Systems. Commercial Chapter 11 filings totaled 722 in May 2020, elevated from the May 2019 total of 487. Conversely, total commercial filings decreased 28% in May 2020, as the 2,578 filings were down from the 3,558 commercial filings registered in May 2019. The 39,969 total bankruptcy filings in May 2020 were down 42% from the 68,860 total filings in May 2019. Total consumer filings decreased 43% in May 2020, as the 37,391 filings fell from the 65,302 consumer filings registered in May 2019.
“Companies that tried to shore up their balance sheets at the beginning of the year represent the initial wave of Chapter 11s due to the economic crisis brought about by the COVID-19 pandemic,” Amy Quackenboss, executive director of the American Bankruptcy Institute, said. “The CARES Act and other swift government measures have been successful in keeping consumers afloat during the crisis. As this relief runs its course, however, mounting financial challenges may result in more households and companies seeking the shelter of bankruptcy.”
May’s commercial Chapter 11 filings represented a 29% increase from the 562 filings in April 2020. Total commercial filings were up 12% over the April 2020 commercial filing total of 2,293. Total bankruptcy filings in May represented a 4% increase over the 38,444 total filings recorded the previous month. Total noncommercial filings for May represented a 3% increase from the April 2020 noncommercial filing total of 36,151.
The average nationwide per capita bankruptcy filing rate in May was 1.98 (total filings per 1,000 per population), a decrease from the 2.09 filing rate during the first four months of the year. Average total filings per day in May 2020 were 1,998, a 36% decrease from the 3,130 total daily filings in May 2019.
The ABI recently launched a new COVID-19 resources website for bankruptcy professionals and the public to access essential information and analysis regarding the financial distress being inflicted by the COVID-19 pandemic.
