In January I predicted (see Notable Bankruptcies of 2009: Q1) that “major” bankruptcies in 2009 would challenge the 383 mark set in 2001 (the high-water mark after the dotcom bubble). I even suggested that it was possible that we could exceed 400 “major” bankruptcies in 2009.
According to Bankruptcydata.com, there have been 156 “major” filings thus far in 2009. Assuming that bankruptcies are equally distributed throughout the year, this puts us on pace for 312 bankruptcies. That is tracking well shy of my prediction. In fact, bankruptcies were down significantly from Q1 to Q2, as there were 90 bankruptcies in the first quarter but only 66 in the second.
That stylized fact begs the question: Is that a “green shoot” dip in bankruptcy filings, or is this simply a seasonal fluctuation?
Although I cannot be certain, the latter makes more sense for several reasons. First, bankruptcies are a lagging economic indicator. As with employment, bankruptcies typically peak well after the economic trough. For example, although the dotcom bubble burst in March of 2000, bankruptcies did not peak until 2001, and were elevated into 2002. So even if you believe that the economy has bottomed out (which is not entirely clear yet), we should still expect to see bankruptcies rise. Second, according to bankruptcy statistics from the U.S. Courts website, the pace of bankruptcy filings generally increases in the second half of the year.
For these reasons, I expect the filing pace to quicken as the year goes on, and I believe that we will ultimately challenge the 383 mark from 2001.
Below you can find an updated list of what I see as the “noteworthy” bankruptcies of 2009, as reported by Bankrupctydata.com. New additions since January appear in RED (please note that this is not an exhaustive list):
- 1st Centennial Bancorp (Banking)
- AbitibiBowater Inc. (Paper)
- Adamar Inc. dba Tropicana Casino & Resort (Gambling)
- American Community Newspapers Inc. & LLC (Newspapers)
- ARG Enterprises, Inc. (Restaurants)
- Aventine Renewable Energy Holdings, Inc. (Energy)
- BankUnited Financial Corporation (Banking)
- Bearingpoint, Inc. (Consulting)
- BI-LO, LLC (Supermarkets)
- Bruno’s Supermarkets, LLC (Supermarkets)
- Butler International, Inc. (IT Services)
- Cape Fear Bank Corporation (Banking)
- Capital Corp of the West (Banking)
- Charter Communications, Inc.
