U.S. bankruptcies down
While MF Global Holdings Ltd put bankruptcies front and center in the media in 2011, fewer American companies and individuals declared themselves bankrupt last year than in 2010.
A quick quiz: What do MF Global, American Airlines, Borders Books and 1.35 million Americans have in common? They all filed for bankruptcy in 2011. The Pulse is up today on news that fewer and fewer U.S. firms and citizens are biting the proverbial dust these days.
While MF Global’s spectacular failure put the media spotlight on corporate bankruptcy at the end of 2011, the Los Angeles Times reports today that just 88 publicly traded companies filed for bankruptcy in 2011. That’s down from 106 in 2010 and 211 in 2009.
And personal bankruptcies followed the trend -- down 12 percent to 1 in every 175 Americans last year.
As is the case with most positive stories about the economy in recent months, there is a dark cloud that accompanies the silver lining of today’s news. According to the website of the U.S. Courts, which monitors bankruptcy filings, while there were more than 100,000 fewer bankruptcies filed in 2011, the 1,467,221 people and companies that declared bankruptcy last year was the second-highest tally since the beginning of the U.S. economic crisis.
In parsing today’s numbers for the National Bankruptcy Research Center (NBKRC), Columbia Law School professor Ronal Mann unearthed this not-so-sunny nugget:
“This is the first time year-on-year filings have fallen since 2006 (the year after bankruptcy legislation sharply reduced filings). On a short-term basis, however, prospects are not so sanguine. Numerically, bankruptcy filings in December were almost exactly the same as November (101,000), but December filings are typically quite low. So, on a seasonally adjusted basis filings were actually up 7 percent from November. On the heels of a similar increase in November, there is some reason to think filings in 2012 might start edging up again.”