850 local companies file for bankruptcy in ’10
Commercial establishments continued battling the economy last year. (Credit: © Mauricio Pascual)
The year 2010 witnessed the struggle by 850 commercial establishments that sought protection from the U.S. Bankruptcy Court, either to reorganize or liquidate their operations, local research firm Boletín de Puerto Rico revealed Tuesday. In total, the year wrapped up with a 10 percent increase in overall bankruptcy filings, in comparison to 2009.
The report shows that some 12,380 cases were filed during the 12-month period, including personal bankruptcies. Of those, 1,056 cases were filed in December alone, which also showed a year-over-year increase of 10 percent.
Of the four bankruptcy filing categories, two showed the highest jumps — Chapter 12 cases (applicable only to farming operations), with a 63 percent increase; and Chapter 7 (total liquidation of assets), with a 36 percent increase.
Chapter 13 cases — which enable individuals to work out payment plans with their creditors — remained flat at some 8,000 cases, while Chapter 11 filings — that allow businesses to also reorganize while maintaining control of their operation — were up 3 percent in 2010.
Total accumulated debt associated with all of the bankruptcy filings approached the $2.5 billion mark, up 10 percent over the $2.3 billion reported in 2009. Individuals racked up nearly $1.2 billion of last year’s accumulated debt, Boletín de Puerto Rico’s report shows.
