Bankruptcy cases at -1% through Nov.; Debt flat at $1.7B
The number of bankruptcy cases filed on the island during the first 11 months of 2014 represented at 1 percent year-over-year drop, according to data released Monday by local research firm Boletín de Puerto Rico.
In its report, the company noted that so far, 9,877 cases have been filed as of Nov. 30, of which more than half, or 5,875 were filed by individuals seeking Chapter 13 protection from the U.S. Bankruptcy Court. Chapter 13 protects individuals who seek to liquidate debt by establishing repayment plans. In all, the number of cases filed so far were 6 percent below those on record for the first 11 months of 2013, the data showed.
Next on the list were Chapter 7 bankruptcies, defined as liquidation filings that allow court-appointed trustees to distribute assets among creditors. A total of 3,796 cases were filed through November, representing a 7 percent year-over-year jump.
Chapter 11 filings, which enable businesses to reorganize their finances while controlling operations, totaled 184 through November, an 8 percent drop for the same 11-month period in 2013.
The fourth category — Chapter 12 filings —saw a 5 percent year-over-year increase, with 22 cases on filed by Puerto Rico farming operations seeking protection from the court.
In November alone, 771 cases were filed, down 6 percent in comparison to November 2013, when 823 cases were filed.
Through November, the island’s most frequent businesses seeking court protection were cafeterias, restaurants, construction contractors, bars or liquor stores and mechanics.
Debt remains flat
Perhaps what is most astounding about Boletín de Puerto Rico’s report is the total accumulated debt associated with the bankruptcy filings. In all, Puerto Ricans racked up more than $1.7 billion in debt during the first 11 months of 2014, a figure that remained virtually flat in comparison to the same period in 2013.
The report shows that the majority of the debt is carried by individuals, who told the court in their filings that they owed a combined $945 million, representing a 7 percent increase over the same period the prior year.
Businesses, meanwhile, racked up nearly $796 million, or 7 percent below last year’s figures. A total of 698 commercial bankruptcies were filed through November, up 7 percent over the number of cases filed through November 2013.
Among the most notable cases are those filed by a duo of hotel properties — Best Western Hotel & Casino Cofresí, with $64.3 million in debt, and Best Western ichi’s Hotel, with $40.7 million in debt — followed by Casa Pitusa Muebles y Enseres, which owed $26.7 million and Mario Samuel Levis, with $29.2 million in debt.