Puerto Rico bankruptcies soar in Nov., up 23%

Written by  //  December 4, 2015  //  Economy  //  No comments

Bankruptcy cases spiked year-over-year in November. (Credit: © Mauricio Pascual)

Bankruptcy cases spiked year-over-year in November. (Credit: © Mauricio Pascual)

Bankruptcy filings soared by 23 percent in November, when a total of 950 cases were filed, in comparison to the same month last year, according to preliminary figures released by research firm Boletín de Puerto Rico Thursday.

The data shows that so far this year, Puerto Rico individuals and corporations seeking protection from creditors have filed 9,588 cases in U.S. Bankruptcy Court. Despite the single-month spike, the first 11 month’s cumulative total represents a 3 percent year-over-year drop, the report shows.

When broken down by categories, the November results conclude that three of the four types of filings showed increases, with only one category remaining flat.

Chapter 7 filings, or those filed by individuals or corporations seeking total liquidation of assets, were up 39 percent in November, with 406 cases filed. So far this year, a total of 4,099 filings have been submitted in court, representing an 8 percent increase year-over-year.

Chapter 13 cases, or those that allow individuals to undergo a financial reorganization supervised by a federal bankruptcy court, were up 12.3 percent in November, when 521 cases were filed. During the first 11 months of the year, 5,317 people have sought the court’s protection, but still represented a 9.5 percent year-over-year drop.

Meanwhile, Chapter 11 filings — a type of legal protection available to businesses and individuals looking to reorganize their finances and start over — totaled 22 in November, up a whopping 57 percent when compared to the same month in 2014. So far this year, 156 cases have been filed, which represent a 15.2 percent decrease when compared to the same 11-month period of 2014.

Some of the most significant filings so far this year have come from familiar names, mostly in the restaurant and hotel industries. This week, the owners of eateries Augusto’s and La Patisserie filed for Chapter 11 protection. The latter restaurant had its assets embargoed by the Treasury Department last week for failing to remit sales and use tax collections.

Finally, Chapter 12 filings, or those reserved exclusively for farmers and agricultural operations, remained flat last month, when a single case was filed. Cumulatively, those types of cases are down 3 percent year-over-year.

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