After a notable rise of corporate Chapter 11 filings last spring, comparable to the numbers seen during the Great Recession, recent reports suggest that bankruptcy practices are on pace for a stronger year than that of 2021 or 2022. That said, if the current trends continue, the number of large corporate bankruptcies this year could reach levels last seen during the global financial crisis, according to a recent study by New Generation Research.
Two comprehensive Q3 bankruptcy reports from New Generation Research’s BankruptcyData and Epiq Bankruptcy suggest that there is continued widespread distress across multiple sectors. Industries such as real estate, health care, retail, restaurants, and manufacturing have borne substantial pressure, indicating heightened financial strain across varied sectors.
This continued rise comes despite a global recovery from the economic setbacks instigated by the Covid-19 pandemic. Factors likely contributing to this trend include shifting consumer demands and lifestyle choices, evolving technology and its impact on traditional sectors, along with the long-term effects of the pandemic on individual businesses and industries.
An in-depth understanding of these contributing factors can potentially aid in creating strategic plans to mitigate the fallout, and help businesses navigate through these financial terrains. With the economy witnessing such trends, considering and preparing for potential bankruptcy scenarios might be an unwelcome but necessary reality for many large corporations.