November 3, 2011 by staff
Filenes Bankruptcy, The press on Wednesday that Syms discount retailer Filene register their basement is seeking bankruptcy protection and liquidate the plan could cause cost-conscious consumers to shed a tear or two cheaper.
The corporate victim, however, is an anomaly in what has been a year quite quiet to notices of bankruptcy protection. Outside the massive implosion of MF Global this week, there have been few other documents, and total assets in the hands of companies going to the bankruptcy court are low.
“Companies are in a position must be a shock to the system, are in a better position to handle,” says Mark Minichiello, director of capital investment in QCA. The overall health of business is clear in:
The drought of bankruptcies this year. If not for MF and 40.5 billion and assets, the value before the bankruptcy of the companies involved would be running in about a quarter of last year’s level.
Even including MF, this year there have been 68 public bankruptcies in the U.S., accounting and $ 56 million in assets, BankruptcyData.com says. The rate has dropped from a slow 106 companies that defaulted in the year 2010 and 89.1 billion in assets.
Limited potential default rate. Just 1.25% of the companies with lower credit ratings are expected to default to the end of this year, says Fitch Ratings Mariarosa Green. This is in line with the default rate of 1.3% last year and also shy of long-term average rate of 5%.
Defaults low worldwide. This year, the U.S. has 72% of the breaches of the world, says Standard & Poors. Even so, by default around the world this year are half of what last year, S & P says.
Green Fitch does not expect a significant increase in defaults, despite Syms situations and MF. She says that MF is unique, and Syms was particularly vulnerable due to its high debt and exposure to consumer spending.
But others are not so sure. Many companies are caught between the sick and dying are just holding, waiting for business to return or rising asset prices so that they can restructure, says Martin Zohn of Proskauer Rose law firm.
The volatility in the stock market means that companies only want to delay further restructuring he says. “It’s wait a little longer,” he says.
Meanwhile, oxygen companies with lower credit ratings were cut off as it becomes more difficult and expensive for them to borrow, says George Putnam, editor of the response letter. And the record levels of debt maturing in 2009. While “2011 is a year of very light (bankruptcy), next year could see a lot,” he says.
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