The increase in bankruptcy activity that began in 2015 accelerated in 2016. The number of publicly traded companies filing for bankruptcy this past year jumped to at least 95 from 79 in 2015, and the total assets of public companies going into Chapters 7, 9 and 11 during 2016 rose by nearly $27 billion to almost $104 billion. Both of these numbers were at the highest level since 2009. The 2016 crop of filings included nine with assets above $3 billion compared to six in 2015 and only two in 2014. Similarly, there were 25 bankruptcies with assets over $1 billion in 2016 versus 19 in 2015 and 11 the previous year.
Energy and mining companies dominated the large corporate bankruptcies once again in 2016. Eleven of the top 15 Chapter 11 filings were by companies in the oil & gas, mining and related sectors. This doesn’t even include the largest filing in 2016, SunEdison, which is involved with a different form of energy – solar. However, it appears that the energy-related bankruptcies are slowing and more filings are coming from other sectors. In the second half of 2016 more than two-thirds of the bankruptcies came from industries outside of energy. While we believe that overall bankruptcy activity will remain at a high level for the foreseeable future, we think that filings in the energy sector may have peaked. They won’t dry up overnight however, and we anticipate that energy bankruptcies will gradually decline over the next 12 to 18 months. Read Entire Article: http://www.turnaroundletter.com/bankruptcy-investing Comments are closed.
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AuthorJoshua Nahas Archives
May 2017
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