COVID19: Pandemic triggers 70% rise in major U.S. bankruptcies

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The number of annual U.S. bankruptcy filings between 2019 and 2020 by public and private companies with liabilities greater than $50 million grew by 69.44%, according to data presented by Buy Shares indicates.

The economic shutdown was a leading catalyst for the bankruptcies.

Last year, the number was at 244, while in 2019, the U.S. recorded 144 bankruptcy filings. In 2018, a total of 124 companies filed for bankruptcy, while 112 followed suit in 2017.

As of 2016, bankruptcy filings amounted to 130 and the figures were at 105 in 2015. The lowest filing in the last 12 years was recorded in 2014 at 96.

In 2013, about 120 companies went bankrupt while in 2012, 2011, and 2010 the figure stood at 105, 118, and 158 respectively.

In 2009, during the financial crisis, the filings stood at 293, the highest figure in the last 12 years. As of 2008, the filing stood at 225.

The research attributes the surge in bankruptcy filings to the health crisis.

According to the research report:

“The sharp rise in bankruptcy filings was due to the pandemic’s impact on the United States economy. During the crisis, the economy was shut down, with millions losing jobs, while small businesses were forced to close due to reduced consumer activity.

The report added that “the filings could have been higher were it not for the government stepping in with a stimulus package. Lenders also rushed to the rescue of most businesses, bailing out companies that were pushed toward restructuring by pandemic shutdowns.”