February bankruptcy filings down 11%

Written by  //  March 2, 2012  //  Economy  //  No comments

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Bankruptcy filings dropped in February, but businesses still sought the court's help the most. (Credit: © Mauricio Pascual)

The island’s bankruptcy filings continued to drop in February, when 11 percent fewer cases were submitted to the court, versus the same month in 2011, according to preliminary numbers released Thursday by research company Boletín de Puerto Rico.

However, the report showed that one category, Chapter 11 petitions, reflected a 7 percent year-over-year hike. Last month, 15 businesses sought to reorganize their finances through this type of protection. So far this year, 29 companies have filed for Chapter 11.

The data shows that a total of 852 cases were filed last month, in comparison to the 988 petitions presented at the U.S. Bankruptcy Court for Puerto Rico during the same month last year. A total of 1,587 cases have been filed during the first two months of the year, down 8 percent from the same period in 2011, Boletín de Puerto Rico said.

When broken down, the majority of the cases, or 534, were filed under the Chapter 13 category, which gives individuals the chance to reorganize their finances. Coincidentally perhaps, the total is 13 percent lower than the cases on file for the same month in 2011. To date, a total of 1,013 personal bankruptcy petitions have been submitted to the court.

Coming in at a distant second are the 299 Chapter 7, or total liquidation cases, tallied for February. That figure is about 6.3 percent lower than those on record for February 2011. During the first two months of the year, a total of 532 such cases have been filed.

Meanwhile, four farming operations filed for Chapter 12 protection, a category that is reserved exclusively for troubled agriculture businesses. So far this year, 11 petitions of this nature have been submitted to the court.

While some sectors may interpret the general drop in bankruptcy filings as a positive sign of a recovering economy, others believe there have been so many petitions filed in recent years that the number of people and businesses left that are in trouble are increasingly fewer.

Because the numbers are preliminary, there were no totals for the debt associated with the cases on record.

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