Bracing for the next phase of the coronavirus recession: Bankruptcies
Of course. When the government prohibits businesses from operating, there will be bankruptcies.
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.