Racing The New Bankruptcy Law
Business bankruptcies are on the rise, but with oil prices and interest rates climbing and a new bankruptcy law about to go into effect Oct. 17, it's hard to tell what, exactly, is driving the increase. Some 8,736 businesses filed for bankruptcy in the second quarter, an 8.3% increase over this year's first quarter and a 5.9% increase over last year's second quarter, according to the Administrative Office of the U.S. Courts.
Robert Keach, co-chairman of business reorganization for the American Bankruptcy Institute, blames the new bankruptcy law for the increase in filings. "I expect the number will go up as we get closer to Oct. 17," he says. Among other changes, the new law will limit extensions for debtors to file a reorganization plan and give businesses less time to decide whether to keep their commercial leases.
By Michael Patterson