Bankruptcy cases up 10% through November; debt exceeds $2.2B
U.S. Bankruptcy Court in Old San Juan (Credit: © Mauricio Pascual)
The number of bankruptcy cases filed on the island during the first 11 months of 2010 represented at 10 percent year-over-year increase, according to data released Monday by local research firm Boletín de Puerto Rico.
In its report, the company noted that so far, some 11,232 cases have been filed as of Nov. 30, of which 38 percent, or 3,800 were seeking Chapter 7 protection from the U.S. Bankruptcy Court. Chapter 7 bankruptcies are defined as liquidation filings that allow court-appointed trustees to distribute assets among creditors.
Chapter 11 filings, which enable businesses to reorganize their finances while controlling operations, totaled 148 through November, an increase of 8 percent for the same 11-month period in 2009.
Chapter 13 cases — which protect individuals who seek to liquidate debt by establishing repayment plans — remained flat at 7,344 through November, up only 1 percent from the 7,422 filed during the first 11 months of last year.
But it was in the fourth category — Chapter 12 filings — that saw the most significant year-over-year growth. This category, which applies only to farming operations — is up 61 percent, reflecting the sector’s ongoing economic troubles. As of November, 29 cases were filed, in comparison to the 18 cases on record through November 2009.
In November alone, 991 cases were filed, up 6 percent in comparison to November 2009, when 934 cases were filed.
Worrisome debt
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 $2.2 billion in debt during the first 11 months of 2010, up 19 percent in comparison to the same period in 2009.
That debt is split almost equally between individuals and businesses, which accumulated more than $1 billion and $1.2 billion, respectively. While the number for individuals represented a 9 percent increase over the same 11-month period in 2009, the amount for businesses jumped by 32 percent. A total of 775 commercial bankruptcies were filed through November.
Among the most notable cases is Caribbean Petroleum Corp., with more than $104.4 million in debt. The company’s bankruptcy followed the historic blast at its fuel depot in Bayamón in October 2009 that birthed a mammoth three-day fire and brought to light numerous safety violations at the plant.
Retailers Dollar y Algo Extra and Supermercados Grande are also on the roster, with $22.7 million and $13.1 million in debt, respectively.
