Pandemic Borrowing Seen Driving the Next Bankruptcy Surge in 2021
- James Sprayregen expects revival in second or third quarter
- Companies that borrowed to survive pandemic will hit a wall
Photographer: Dong Wenjie/Moment RF via Getty Images
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The next big wave of U.S. bankruptcy filings won’t happen until mid-2021, when companies that borrowed heavily to survive Covid-19 hit a wall, says bankruptcy attorney James Sprayregen of Kirkland & Ellis.
“You could think of it as a rat of debt working its way through the snake, and it takes a while for that to happen,” said Sprayregen, whose firm represented some of largest U.S. companies that went bankrupt during the pandemic. “A big wave has already happened and we have a semi-hiatus for maybe the rest of the year,” he said in a telephone interview Monday.