The bankruptcy landscape in 2023 saw significant domination by repeat Chapter 11 filers, marking it as one of the largest years for such cases. As detailed in a report by Bloomberg Industry Group, many of these businesses had previously sought protection under Chapter 11, indicating that they were unable to successfully implement necessary adjustments or reductions during their first filing. Read more here.
According to the report, at least 19 companies, each holding over $10 million in debt, filed for Chapter 11 bankruptcy for the second time or more. This marks the highest number of such filings, also referred to as ‘Chapter 22s’, since 2020, at the peak of the Covid-19 pandemic. The pandemic pushed numerous businesses that were already struggling to resort to severe measures, such as filing for bankruptcy.
The retail industry, in particular, saw a slew of these second-time filings. The year 2023 stands among the top years for repeat bankruptcy filings since the turn of the century.
These findings suggest that a significant number of companies could not achieve the substantive business modification or cost-cutting measures necessary to recover from their initial Chapter 11 filing. This raises questions regarding the efficacy of the initial bankruptcy protections and restructuring attempts taken by these businesses.