Chapter 11 bankruptcy filings are soaring in New York and Delaware, according to a New York Federal judge speaking at a bar association panel discussion late last week.
“Chapter 11s have exploded” said U.S. Bankruptcy Judge Shelley Chapman told the panel suggesting that businesses are suffering mightily in the latest near zero business growth.
Chapter 11s have tripled in the first quarter of the year, Chapman added.
“The report is that for at least a lot of retailers, it is certainly a difficult, if not flat-out impossible environment to operate in,” Judge Shannon said in her discussion. “We do see more of those cases likely on the horizon.”
And according to other data Delaware state court, according to Judge Brendan Shannon has also seen an uptick in Chapter 11s filings, though not as marked as in New York. Shannon also sees the trend in retail and energy sector bankruptcies continuing, based on current cases.
So Delaware state court, which administers many corporate filings due to its pro-business laws, and the federal court in New York are both seeing upticks in businesses failing.
These are retailers that offer entry-level jobs for some and a much-needed part-time jobs to people displaced from their full-time career are reorganizing in bankruptcy, which usually means closing stores and laying off tens of thousands in the aggregate.