Apparently, 2008 is the summer of debtors' discontent. With apologies to William Shakespeare, data compiled by BankruptcyInsider.com
has shown that at least 15 debtors with at least $10 million in assets
or debts have filed for Chapter 11 in the first 13 days of August
alone. Add to that a July that saw at least 64 debtors with at least
$10 million in assets or debts falling into bankruptcy.
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Compare those figures with 2007's and it is evident that these are the
true dog days of summer. In 2007, according to BankruptcyInsider.com,
there were nine filings of at least $10 million in assets or debts
between Aug. 1 and Aug. 13 and a total of 21 during the month of July.
Thus, there have been twice as many bankruptcies of at least $10
million in assets or debts in that time frame this summer compared to
the last one.
It was last summer that we saw the first bankruptcies connected to the
subprime mortgage crisis. There was Alliance Bancorp. (July 13, 2007),
American Home Mortgage Investment Corp. (Aug. 6, 2007), Homebanc Corp.
(Aug. 9, 2007), Aegis Mortgage Corp. (Aug. 13, 2007), Sentinel
Management Group Inc. (Aug. 17, 2007) and First Magnus Financial Corp.
(Aug. 21, 2007), all mortgage lenders.
More troubling this summer has been the spread of large filings across
all types of sectors, from auto parts to restaurant owners to
homebuilders to retailers. The largest include Atlantis Plastics Inc.
(Aug. 10), Ascendia Brands Inc. (Aug. 5), Boscov's Inc. (Aug. 4), WCI
Communities Inc. (Aug. 4), S&A Restaurant Corp. (July 29), SemGroup
LP (July 22), American Color Graphics Inc. (July 15), Steve &
Barry's LLC (July 9) and Syntax-Brillian Corp. (July 8).
Of course, this list doesn't even include the rash of filings in, say,
the trucking industry. Now the credit crisis isn't the only problem
confronting companies on the edge. Add the high price of gas and a drop
in consumer spending to the list of reasons that companies cite for
their bankruptcy filings. - Ben Fidler
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Our member-owned organization, National Association of Credit Management-Great Lakes represents business credit granting companies. Our members are painfully aware of this increase in bankruptcy filings. Being in the Detroit area, it's been especially painful to the Automotive Industry suppliers. To help our members, we're sponsoring a U.S. & Canadian Bankruptcy seminar on October 21st. Knowledge of the Canadian bankruptcy process is becoming more critical as customers move into Canada for logistics or wage reasons. See our website for more information