Puerto Rico bankruptcies down 17% in September

Written by  //  October 30, 2012  //  Economy  //  No comments

U.S. Bankruptcy Court building in Old San Juan (Credit: © Mauricio Pascual)

The 840 bankruptcy cases filed in Puerto Rico in September were 17 percent lower than the same month last year, while the total number of petitions to the U.S. Bankruptcy Court submitted during the first nine months of this year were also down by 9 percent vs. the same year-ago period, a local research firm revealed Monday.

Data compiled by Boletín de Puerto Rico shows that there had been 7,815 petitions filed through September, down from the 8,559 on record for January-September 2011.

When broken down, the majority of the cases filed so far this year, or 4,945, were filed under the Chapter 13 category, which gives individuals the chance to reorganize their finances. The total is 9 percent lower than the cases on file through the same month in 2011.

Coming in at a distant second are the 2,707 Chapter 7, or total liquidation cases, tallied through the first nine months of this year. That figure is 8 percent lower than those on record through the same period in 2011.

There are 134 Chapter 11 filings on record so far this year, from businesses that are seeking to reorganize their finances through this type of protection. The most troubled operations so far this year are construction contractors, physicians, dairy plants, mechanics, restaurants and cafeterias.

Still, Boletín de Puerto Rico noted in its report that through September 2012, approximately 555 commercial bankruptcies have been filed in total, representing a  24 drop from the 734 cases on record in 2011.

Meanwhile, a whopping 29 farming operations filed for Chapter 12 protection, a category that is reserved exclusively for troubled agriculture businesses.

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.

In terms of the debt associated with the bankruptcy filings, Boletín de Puerto Rico pegged the figure accumulated in September at nearly $1.7 billion, or an 18 percent drop from the same month last year.

That number is split between secured debt, which exceeded $844.4 million, down 25 percent from the same month in 2011; $859.4 million in uninsured debt, a 13 percent year-over-year reduction; $30.5 million in prioritized debt, down 5 percent when compared to September 2011; and, $14.1 million in unspecified debt.