Commercial Chapter 11 Bankruptcy Filings Decrease Annually, But...

Authored by Naveen Athrappully via The Epoch Times,

There were 666 commercial Chapter 11 bankruptcy filings made in the United States in July, a 27 percent drop from a year ago, according to the American Bankruptcy Institute (ABI).

Chapter 11 bankruptcy allows a business to reorganize its debts so it can continue operating and eventually become solvent. In addition to a decline in Chapter 11 filings, overall commercial bankruptcy filings declined in July, falling by 8 percent year over year, ABI said in an Aug. 6 statement.

The decline in July's commercial filings followed improved economic conditions in June. The 12-month inflation rate declined in June from the previous month after surging for three consecutive months.

According to a July 24 report from S&P Global, U.S. business activity growth accelerated to an eight-month high last month, with business confidence in the year-ahead outlook rising to an eight-month high as well.

ABI clarified that although the number of Chapter 11 filings fell this year, more than 300 filings were made in connection with a large healthcare system's bankruptcy.

Meanwhile, despite the overall decline in Chapter 11 filings, subchapter V bankruptcy elections within Chapter 11, which represent filings by small businesses, rose 24 percent in July from a year earlier.

This is despite an improvement in small bu