The Big Unravel: US Commercial Bankruptcies Skyrocket

[marmar]

The Big Unravel: US Commercial Bankruptcies Skyrocket
by Wolf Richter • July 6, 2016


[font color="blue"]Instead of that promised “escape velocity.”[/font]

This year through June, there have been 91 corporate defaults globally, the highest first-half total since 2009, according to Standard and Poor’s. Of them, 60 occurred in the US. Some of them are going to end up in bankruptcy. Others are restructuring their debts outside of bankruptcy court by holding the bankruptcy gun to creditors’ heads. In the process, stockholders will often get wiped out.

These are credit fiascos at larger corporations – those that pay Standard and Poor’s to rate their credit so that they can sell bonds in the credit markets.

But in the vast universe of 19 million American businesses, there are only about 3,025 companies, or 0.02% of the total, with annual revenues over $1 billion; they’re big enough to pay Standard & Poor’s for a credit rating.

About 183,000 businesses, or less than 1% of the total, are medium-size with sales between $10 million and $1 billion. Only a fraction of them have an S&P credit rating, and only those figure into S&P’s measure of defaults. The rest, the vast majority, are flying under S&P’s radar. About 99% of all businesses in the US are small, with less than $10 million a year in revenues. None of them are S&P rated and none of them figure into S&P’s default measurements.

So how are these small and medium-size businesses doing – the core or American enterprise?

Total US commercial bankruptcy filings in June soared 35% from a year ago, to 3,294, the eighth month in a row of year-over-year increases, the American Bankruptcy Institute (in partnership with Epiq Systems) reported today. ................(more)

http://wolfstreet.com/2016/07/06/big-unravel-u-s-commercial-bankruptcies-skyrocket/

[roamer65]

1. It's imploding in the UK.

Sounds like at least 6 major real estate investment funds have shutoff redemptions.

Not looking good, along with Italian banks on edge.

[fasttense]

2. As the owner of a small business

Things were looking up last year. My sales were really getting back to where they were in 2007. But this year has been really tough. Sales are down about 25% this year and despite discounts and sales, things are not improving.

It's almost as bad as it was in 2010, which was a very bad year for us.

[Hiraeth]

3. My brother is in the process of selling his business trying to

Avoid bankruptcy. Potential buyer yesterday. Need to call for an update