Business Bankruptcies Expected To Rise In 2012

: Chris Lee Law Firm

  Filed under: News

business bankruptcyThe year 2011 no doubt challenged us personally and in business. Unemployment rate spikes, continued foreclosure crisis and concerns over our national budget became front runners among government concerns. With all the attention drawn to the effects of a turbulent economy we also saw more big names hitting the headlines with their announcement of filing for bankruptcy.



Making Headlines In The New Year

Chapter 11 bankruptcies became quite popular among article headlines last year, a trend that is expected to continue in 2012. Reports are showing that we can reasonably expect the number of and size of business bankruptcies to double this year alone. Why?

In the past, short term financial fixes have been moderately successful in staving off further financial troubles. With major markets like the manufacturing and airline industries hemorrhaging money, short term solutions simply will not fit the bill any longer. It is anticipated that middle market companies, valued between $200 million to $1 billion, are the most likely of candidates for bankruptcy court.

Despite the expected increase in filings for this year it is also expected that the value of associated corporate bonds will be relatively unaffected. The exception being companies that carry high-yield and low grade bonds, who are reported to be at the highest risk of bond devaluation. Forecasters are keeping an eye on corporations like major restaurant franchises, retail and consumer product firms in the coming year.

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