Bankruptcy boom hits US economy
Latest figures from across the pond show the number of collapsed companies in 2001 rose by 19% on the year, with 250,000 more companies filing for Chapter 11 bankruptcies than in 2000.
Filings since the 11 September terrorist attacks rose 18% in the fourth quarter, beginning 1 October, climbing to 364,921. In November, the US economy was officially in recession.
In total, 1,492,129 companies went to the wall in the US in 2001, compared with 1,253,444 in 2000, data from the Administrative Office of the US Courts revealed.
Compared with these figures, corporate insolvencies in the UK fell from 40,847 in 2000 to 40,532 in 2001, a drop of 0.8%, according to business information company Dun & Bradstreet.
In recent months the US has been hit by a spate of massive corporate collapses. The biggest of these by far has been the fall of energy giant Enron, once worth $180bn. But this has been followed shortly afterwards by the demise of discount retailer K-Mart, the biggest Chapter 11 in US retail history and most recently telecom Global Crossing collapsed, the fourth biggest filing in the country’s history.
Executive director of the American Bankruptcy Institute, Samuel Gerdano, said 2001 was ‘a boom year for bankruptcies’.