A total of 2,973 commercial Chapter 11 bankruptcies were filed in the first six months of 2023. — Reuters
NEW YORK: US Chapter 11 bankruptcy filings jumped 68% in the first half of 2023 from a year earlier, Epiq Bankruptcy, a provider of US bankruptcy filing data, says.
SVB Financial Group, Envision Healthcare Corp, Bed Bath and Beyond, Party City Holdco, Lordstown Motors and Kidde-Fenwal were among some high-profile casualties of decades-high interest rates and sticky inflation as the era of easy money drew to a close, analysts said.
“The growth in the number of filings is reflective of more families and businesses facing surging debt loads,” American Bankruptcy Institute’s executive director Amy Quackenboss said in a statement.
This was mainly due to rising interest rates, inflation and increased borrowing costs, she added.
The Federal Reserve has raised its key interest rate to a target range of 5% to 5.25% after 10 straight hikes, making borrowing more expensive for companies and individuals.
The US central bank left interest rates unchanged in June, but sees two more hikes by the end of 2023.
A total of 2,973 commercial Chapter 11 bankruptcies were filed in the first six months of 2023, Epiq said.
This compared with the 1,766 filed during the same period last year, the data provider added.
Additionally, individual Chapter 13 filings also saw a 23% jump during the same period.
Bankruptcy filings for small business, categorised as Subchapter V elections within Chapter 11, jumped 55%, according to the data. — Reuters
