Total commercial Chapter 11 filings in May increased 48 percent from the previous year, according to data provided by Epiq Systems, Inc. Commercial Chapter 11 filings totaled 722 in May 2020, elevated from the May 2019 total of 487, the American Bankruptcy Institute reported. Conversely, total commercial filings decreased 28 percent in May, 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 were down 42 percent from the 68,860 total filings in May 2019. Total consumer filings decreased 43 percent in May, 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,” said ABI Executive Director Amy Quackenboss. “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 percent increase from the 562 filings in April 2020. Total commercial filings were up 12 percent over the April 2020 commercial filing total of 2,293. Total bankruptcy filings in May represented a 4 percent increase over the 38,444 total filings recorded the previous month. Total noncommercial filings for May represented a 3 percent 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 percent decrease from the 3,130 total daily filings in May 2019. States with the highest per capita filing rates (total filings per 1,000 population) in May 2020 were:
- Alabama (4.66)
- Tennessee (4.05)
- Delaware (3.90)
- Mississippi (3.64)
- Georgia (3.45)
ABI’s COVID-19 Resources website is continually updated for bankruptcy professionals and the public to access essential information and analysis regarding the financial distress being inflicted by the COVID-19 pandemic. The site features exclusive ABI content on the crisis, recommended member analysis, industry sector news, charts and more. Also, ABI’s SBRA Resources webpage is routinely updated with information, analysis and events related to the Small Business Reorganization Act that went into effect this year to make bankruptcy more accessible, efficient and cheaper for struggling small businesses.