Number of Chapter 11 Filings Lower Than Recession LevelsJanuary 6, 2012 – In The News
Joshua Klein commented on findings that while local chapter 11 business bankruptcy filings are elevated, they are not as high as levels from 2008. Klein and other bankruptcy attorneys agree that this may not mean there are fewer troubled companies, but that more businesses are seeking out-of-court settlements.
Klein said after the massive increase in filings in 2000, lenders began extending loan terms rather than calling defaults on loans in 2010.
"But that's not going to continue," said Klein. "You are starting to see a prohibitive drop in loan extensions. Banks just can't keep doing that forever. Three years is a long time to keep a company on life support. We'll definitely see more filings this year."