October 2024: Recent Developments in the Realm of Bankruptcy and Restructuring

In an effort to keep you apprised of what’s happening in the realm of bankruptcy and restructuring, here are four recent developments to be aware of.

1. Epiq AACER found that Commercial Chapter 11 filings during the first three quarters of 2024 increased by 33% compared to the same time period last year. Meanwhile, commercial filings, generally, are up 20% year-over-year, from 18,774 during the first three quarters of 2023 to 22,550 in 2024. Epiq expects commercial filings to continue to rise into 2025.

2. According to S&P Global Market Intelligence, among all companies seeking bankruptcy court protection from creditors in 2023 were 26 private companies that had recently secured loans in the private debt market (ie, non-bank loans). These companies accounted for just 4.3% of all private company bankruptcy filings last year. According to S&P, “The data appears to bolster private lenders' reputation for flexibility, a willingness to proactively work with loan recipients and restructure loan agreements before they reach the precipice of default.”

3. Large retail and consumer goods companies like Tupperware, Hoonigan, and Big Lots all filed for bankruptcy in the last month. Spirit Airlines just announced that they are considering bankruptcy. These announcements support CFO Magazine's recent reporting that corporate bankruptcy has been more frequent this year within industries most impacted by rising costs and the residual effects of COVID-19–specifically retail, services, and manufacturing.

4. Corporate debt is down. The S&P 500 reported that total debt for the US companies it covers lowered to $8.43 trillion in Q2 from a record high of $8.52 trillion in the first quarter of the year.