Kansas City-based law firm is seeing the highest rate of Chapter 11 bankruptcies in seven years, according to its Polsinelli-TrBK Distress Indices Report.
“It’s actually quite common to not see an immediate increase in bankruptcies during an economic crisis. With so much market volatility, it’s difficult predict what will happen next, so it’s difficult to develop your exit strategy,” said Polsinelli Shareholder Jeremy Johnson, a bankruptcy and restructuring attorney and co-author of the report. “We anticipate a significant increase in filings going forward dealing with the fallout, but there are no solutions yet. Avoid filing unless you have an exit strategy or unless your hand is forced by a creditor.”
The spike in increases happened in March. Healthcare is the industry most impacted by the spike, which hit 133 percent over its benchmark. It is reportedly the 12th-straight quarter of healthcare distress.