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Friday, June 12th, 2020

Bracing for the next phase of the coronavirus recession: Bankruptcies

Author:     KHRISTOPHER J. BROOKS
Source:     CBS News
Publication Date:     JUNE 9, 2020 / 3:30 PM
 Link: Bracing for the next phase of the coronavirus recession: Bankruptcies
Stephan:   Here is what I predicted was coming when this pandemic first began, a massive increase in bankruptcies, and a resultant devastating increase in American families in financial distress. We are a long long way from getting over the effects of the Covid-19 and its impact on every aspect of our society. All of this should have been anticipated, planned for, and to the degree possible ameliorated. None of it was, of course. One can only wonder what would have happened under President Pelosi, if Trump and Pence had been removed from office as they should have been, before the pandemic became an issue.

Art Van Furniture, Bar Louie and True Religion all sell different products, but they all have one thing in common: Each has gone bankrupt this year, as the coronavirus-induced recession that started in February flattens businesses large and small.

Recent data show 722 companies sought bankruptcy protection around the U.S. last month, a 48% increase from the year-ago period. Chapter 11 filings also jumped in April and March, as states started imposing business restrictions amid the coronavirus outbreak. 

“This is a sign that already weak companies are succumbing to the lockdown recession,” Chris Kuehl, an economist with the National Association of Credit Management, which tracks bankruptcies, said in a research note. Businesses that were struggling before the pandemic “are starting to get in some real trouble,” he added.

Among those long-distressed companies finally tipped into bankruptcy by the economic fallout from COVID-19: Gold’s Gym, Hertz, J. Crew, J.C. Penney and Neiman Marcus. 

Although Congress has passed relief programs designed to help businesses […]

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