Commercial chapter 11 filings during the first six months of the year 2020 increased 26 percent over the year before, and Alabama had the highest per capita rate of bankruptcy filings for the six-month period, according to data released yesterday by the American Bankruptcy Institute.
Alabama had a 4.46 per capita rate of filings for all forms of bankruptcy for the first half of 2020, compared to a national average for the period of 1.92 percent.
The national per capita rate was surprisingly a slight decrease in the first half of 2020, owing to an offset of Covid economic setbacks by unemployment and other forms of government relief.
So the first half statistics are not as bleak as those that may be coming down the pipeline.
“Businesses and consumers continue to navigate a challenging economic course as a result of the financial crisis due to the Covid-19 pandemic,” said ABI Executive Director Amy Quackenboss. “As government lifelines to help stabilize the economy begin to expire, bankruptcy provides a shield for households and companies facing intensifying financial distress. We anticipate filings to begin increasing as a result.”
While total commercial chapter 11 filings during the first six months of 2020 increased 26 percent, total commercial bankruptcy filings (all forms) for the period dropped 11 percent compared to 2019.
During June there were a number of notable chapter 11 cases filed, including two more Catholic Dioceses, numerous large energy-related cases including Chesapeake Energy, a leading shale oil stock, and a number of well-known national companies such as 24 Hour Fitness, General Nutrition, Libbey Glass and Chuck E. Cheese.
Rounding out the top five states for highest per capita fillings, behind Alabama, were Delaware (3.89), Tennessee (3.88), Mississippi (3.49) and Georgia (3.25).
For its data reports, ABI partners with Epiq, which sells management software for the legal profession.