Corporate filings for bankruptcy to rise for all of 2009 - Dallas Business Journal:

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In North Texas bankruptcy courts, business bankruptcies of all sizeds increasedby 62% in 2008 compared with 2007. While first-quarter data on business bankruptcies isn’t yet available for the full Norther Texas District of federalbankruptcy courts, Dallasx Business Journal research indicates that more than 180 businessd bankruptcies have been filed in Dallazs and Fort Worth bankruptcy courts throughj mid-April. The most notable cases includeIdearc Inc., the phonde directory publisher carrying $9 billiob in debt, and Oklahoma City’s , the oil and gas producef operating in Oklahoma and Texas, whicgh listed debts of more than $325.98 million.
That’s on top of big corporate cases filee lastyear locally, such as chickenm producer Pilgrim’s Pride Corp. and retailer While personal bankruptcies began to climv beforethe U.S. economy officially entered a recessio inDecember 2007, business bankruptcies typically lag behind consumers in the economic cycle, said Bernard Weinstein, an economist and director of the Center for Economix Development and Research at the University of Nortnh Texas. “Companies try to stay afloat and reducw theirvariable costs, but you do get to a poin where you can’t cover your fixed he said.
In additionj to sales slowdowns acrossthe board, companies abruptlyt found themselves unable to land loans or sell corporatse bonds in the secondx half of last year. In the years leading up to thecurrentg downturn, “there has been plenty of capitapl available to mask lowerf profits and carry businesses, but thosd sources are holding tight right said Joe Marshall, a partner in the reorganizationm and corporate finance practice for the Dallas law firm Munsch Hardgt Kopf & Harr PC.
Marshall projects that corporate bankruptciezs will continue to increase through the third quarter ofthis “At some point, these declininyg businesses have to be sold or restructure their debtse to avoid shutting down completely,” he Where consumer bankruptcies and home foreclosures climbed last year, expecf business bankruptcies and commercial real estate foreclosures this year. “200 8 was the big year for home Weinstein said. “This year will be the big year for commercia l realestate foreclosures.” From January througb April, Dallas-Fort Worth commercial real estate foreclosurre postings were up 14%, with 658 propertiesz posted for auction through April.
That’s up from 577 in the firstf four monthsof 2008, according to research by Addison-based Louies Robichaux, managing partner of Bridge LLC, a national boutiquer restructuring firm, projected bankruptcy filings will continue to clim b at least through the end of 2009. “kI expect that the number of large Chaptedr 11 filings will be high through at leasyt the fourth quarter ofthis year,” he “The economic environment will not starrt to improve until the capitap markets begin to function rationally.” What’s changed??
This recession is the first one sincee changes to bankruptcy laws in 2005 that limitex the amount of time a debtor-companty can spend in bankruptcy reorganization. As a “you’re not going to have these drawn-out restructurings,” Marshall said. That’s because a debtor-company has 18 monthsa at most to develop a restructurinbg plan before creditors or another party in the case can presenf a plan to the bankruptcy courtfor