Since the end of the Great Recession, the number of individuals and businesses filing for Chapter 11 bankruptcy has declined significantly. However, a recent survey of 165 bankers, fund managers, lawyers and other restructuring professionals suggests that the United States may see an uptick in Chapter 11 filings in certain industries.
In the Ninth North American Restructuring Experts Survey, which was done by the consulting firm Alix Partners, respondents predicted that the energy sector, the resource sector, the retail industry and the health care industry are likely to experience the most distress and will probably do the most restructuring.
The survey is particularly interesting because it offers predictions for the U.S. and internationally. Those surveyed said they expect financial distress to affect energy and resource providers about the same in the U.S. and in other countries. However, retail was predicted to be more distressed in the U.S. than elsewhere. The rise in retail bankruptcies in recent years is due in large part to the pressure e-commerce has placed on brick-and-mortar retailers.
Respondents ranked the U.S. health care industry as the third most likely to see a significant rise in restructuring activities, while on the global list health care was ranked near the bottom. Of course, changes required by the Affordable Care Act have played a major part in the need for health care companies to change their business models. In other countries, health care is run and regulated by the government, and those markets remain relatively stable.
You can read more about the survey in a recent report in Spend Matters.
If you have questions about restructuring plans under Chapter 11, then speak with an experienced bankruptcy attorney.