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

UN: 1 Million Somalis at Risk of Hunger

Group warns region is in dire need of humanitarian aid, with at least 200,000 children under age of five acutely malnourished as drought hits southern, central part of nation More

Human Rights Groups Allege Supression of Freedoms in Thailand

Thailand’s military, police have suppressed release of independent report assessing human rights in kingdom during first 100 days of latest coup More

Jennifer Lawrence Contacts FBI After Nude Photos Hacked

'Silver Linings Playbook' actress' photos were posted on image-sharing forum 4chan; Federal Bureau of Investigations is looking into matter More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Schools Resume Classes, Donate to Government Forcesi
X
September 02, 2014 12:58 PM
A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Internet, Technology Offer New Tools for Journalists

The Internet and rapidly evolving technology is quickly changing how people receive news and how journalists deliver it. There are now more ways to tell a story than ever before. One school in Los Angeles is teaching the next generation of journalists with the help of a state-of-the-art newsroom. Elizabeth Lee has this report.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.