Bankruptcies Set to Increase as Debt Maturities Loom

Serving as a partner at Squire Patton Boggs (US) LLP, Norman Kinel is a New York based partner and member of the firm’s Restructuring & Insolvency Practice Group and heads the Firm’s Creditors’ Committee Practice as national chair. In late 2019, Norman Kinel was a participant in Corporate LiveWire’s Bankruptcy and Restructuring Virtual Roundtable.

The first topic discussed was the bankruptcy and restructuring landscapes presently existing in each panelist’s jurisdiction. As Mr. Kinel described it, there has been a slight increase in business bankruptcy filings, which he felt may presage a wave of filings in sectors that are particularly vulnerable.

In addition, with debt maturities approaching for a diversity of over-leveraged companies, lenders are less likely to extend deadlines when reaching their natural limits. At the same time, political uncertainties abound domestically and worldwide, and a recession is “long overdue” when going by historical standards.

A fellow panelist noted that, with bankruptcy filings having last reached a peak in September of 2010, followed by years of decline, non-business bankruptcies continued to decline, but only marginally. At the same time, the first half of 2019 witnessed a significant increase in business bankruptcies, led by major national retailers.