News / Economy

US Business Bankruptcies Dropped 24 Percent in 2013

Reuters
Business bankruptcy filings in the United States dropped 24 percent in 2013 to their lowest level since at least 2006, according to a report on Monday.
 
Overall, bankruptcies by businesses and individuals combined fell 13 percent, said the report, released by the American Bankruptcy Institute.
 
Bankruptcy filings by businesses and individuals spiked as the United States entered recession in 2007. The numbers have fallen steadily in recent years as the U.S. Federal Reserve has kept borrowing costs low.
 
Monday's report, which was compiled for the ABI by bankruptcy claims processor Epiq Systems Inc, said 44,111 businesses filed for bankruptcy in 2013, down from 57,964 in 2012. Epiq's data goes back to 2007.
 
Total filings by businesses and individuals fell to 1.03 million, the report said, from 1.19 million in 2012. The number of filings fell in every state but rose by 7 percent in Puerto Rico, which has been hit by a prolonged recession.
 
The average number of filings by businesses and individuals over the past five years was 1.32 million per year. That historically low level is partly the result of a 2005 law that made it harder for individuals to declare bankruptcy. In the 10 years leading up to enactment of the law, filing averaged 1.5 million per year, according to the ABI.
 
Teresa Kohl, a bankruptcy expert at SSG Capital Advisors, an investment bank that specializes in corporate restructuring, said she expected businesses to continue to avoid filing for bankruptcy, even if it might be in their interests to do so.
 
“Bankruptcy is still viewed as expensive proposition and it's something that people tend to avoid at all costs,” Kohl said. “I don't think in 2014 there is going to be any dramatic change.”
 
For 2014, she said she expected to see healthcare companies under stress due to regulatory changes and agriculture businesses struggle as raw material costs increase. The number of business failures could grow if interest rates rise sharply, she said.
 
According to the report, the U.S. bankruptcy court in Wilmington, Delaware, led the country in business Chapter 11 filings in 2013. Among the large filings were battery-maker Exide Technologies, plug-in hybrid car-maker Fisker Automotive and the Edwin Watts Golf Shops chain.
 
Big U.S. businesses tend to incorporate in Delaware, which gives them the option to use the U.S. bankruptcy court there if they need protection from creditors.
 
The U.S. bankruptcy court in Los Angeles led the country in Chapter 11 business filings between 2010 and 2012. Its counterpart in Manhattan, also among the busiest in the country, last led in Chapter 11 business filings in 2009.

You May Like

Philippines, Muslim Rebels Try to Salvage Peace Pact

Peace process faces major setback after botched military operation to find terrorists results in bloody gunbattle between government forces, Moro Islamic Liberation Front fighters More

Republicans Expect Long, Expensive Presidential Battle

Political strategist says eventual winner will be one who can put together strongest coalition of various conservative groups that make up Republican Party More

Video New Wheelchair Is Easier to Use, Increases Mobility

Engineers have come up with a lever-operated design that makes use of easily accessible bicycle technology More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.9211
JPY
USD
119.18
GBP
USD
0.6722
CAD
USD
1.2509
INR
USD
62.518

Rates may not be current.