According to the American Bankruptcy Institute, the distressed state of the energy & retail sectors in the American economy has led to significant increases in business bankruptcy filings.
The total number of both business and consumer bankruptcy filings decreased ten percent in April 2016, when compared with the same month last year, with consumer filings dropping eleven percent year-on-year. However, business bankruptcy filings increased by more than one-third. There were 3,482 business filings in April, 2016, as compared with 2,641 filings in April 2015. Moreover, this is the sixth, consecutive monthly increase year-over-year.
S&P Issues Grim Report
In related news, S&P Global Ratings reports that corporate debt defaults are at the highest level since the 2008 meltdown hit the economy. Moreover, 3 out of 4 of the recent credit downgrades were from the petrochemical industry from a total of 57 such companies. The S&P notes that the energy, metals, and natural resources parts of the economy amount to the majority of defaults.
Unless the energy sector stabilizes, and/or retail sales begin to improve, we can expect more of the same. However, with the recent bankruptcies of Sports Authority, Aeropostale, and Fairway, the outlook is not good.
For more posts dealing with energy companies filing for Bankruptcy, take a look at: