Matador Legal

United States recorded 7,514 business bankruptcies in May 2009, a rise of 40% over the same month last year. The total number of companies which have filed for Bankruptcy since the last 18 months stands at over 100,000.

The creditors of these companies, mostly Bankers, are more willing to liquidate the company and sell of the assets than wait for two years for the company to recover. This is because the Banks themselves are not in a good state in this recession. Rather than harbor hope of a company recovering and paying of its debt, the banks prefer to liquidate a company and move on.

Two main reasons for these unusual numbers are a sluggish economy with no demand and unavailability of credit from Banking Institutions. According to AACER, this year only 18% of the Business Bankruptcies have been chapter 11.

When one looks at the overall health of the companies in US, these numbers just tell one side of the story, one also has to take cognizance of the businesses which simply fold up without getting into Bankruptcy.

Related Links:

http://www.businessweek.com/smallbiz/content/jun2009/sb20090623_271086.htm?chan=top+news_top+news+index+-+temp_top+story