An Escalating Number Of Companies Seek Bankruptcy Protection
February 7, 2001
A growing number of companies, both publicly-traded and privately-held, are seeking Chapter 11 bankruptcy protection, figures show. The numbers for publicly-traded companies alone have more than doubled since 1997 -- and their pre-petition worth has shot up more than five-fold.
- According to BankruptcyData.com, 176 publicly-traded companies with assets totaling almost $95 billion filed for Chapter 11 last year.
- That compares with just 83 companies worth a bit more than $17 billion in 1997.
- In the last major economic downturn in 1991, 123 companies with assets of $94 billion sought bankruptcy protection.
- Analysts expect other cash-strapped companies to opt for bankruptcy in coming weeks -- including movie chain Loews Cineplex Entertainment and chemicals maker W.R. Grace.
Experts say it is companies that are highly leveraged with debt which are the most vulnerable.
Source: Thor Vladmanis, "Bankruptcy Protection Filings Pile Up," USA Today, February 7, 2001.
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