December 2019
Trends and Developments
Chambers Global Practice Guide Insolvency 2019
Reprinted with permission from Chambers & Partners
Current State of the Restructuring Market
As of August 2019, there was a small increase in US Chapter 11 commercial bankruptcy filings in 2019 versus 2018. Total US bankruptcy filings increased 6.1% in August 2019 over August 2018, according to data provided by Epiq Systems, Inc’s statistic service AACER.
In 2019, the industries with the most bankruptcy filings included energy, retail and healthcare.
Energy industry filings
By August 2019, 26 oil-and-gas producers, including Sanchez Energy Corporation and Halcón Resources, had filed for bankruptcy, according to a report by the law firm Haynes and Boone LLP. That nearly matches the 28 producer bankruptcies in all of 2018, and the total number for the year is expected to rise as companies face mounting debt maturities.
According to Fitch Ratings, energy companies with junk-rated bonds were defaulting at a rate of 5.7% as of August, the highest level since 2017. This metric is considered a key indicator of the industry’s financial stress.
Retail industry filings
2019 saw big names such as Sears, Shopko, Gymboree, Charlotte Russe, Things Remembered, Payless, Diesel, Z Gallerie, and Barneys New York file for Chapter 11 protection.
Healthcare filings
By July 2019, at least 17 hospitals had filed for bankruptcy protection across nine states. These include De Queen Medical Center in Arkansas; Oswego Community Hospital, Horton Community Hospital, and Hillsboro Community Hospital in Kansas; Penobscot Valley Hospital in Maine; I-70 Community Hospital in Missouri; Washington County Hospital in North Carolina (via involuntary Chapter 7); Prague Community Hospital, Haskell County Community Hospital, Drumright Regional Hospital, and Fairfax Community Hospital in Oklahoma; Hahnemann University Hospital and St Christopher’s Hospital in Pennsylvania; Lauderdale Community Hospital in Tennessee; and Astria Health, a three-hospital health system in Washington. Ten of these hospital filings are associated with EmpowerHMS.
