P.R. bankruptcy filings drop 30% in July
Puerto Rico’s bankruptcy levels continued their downward trend last month, when the total number of companies and individuals who turned to the U.S. Bankruptcy Court for help was reduced by 30 percent in comparison to the same month in 2010.
So far this year, there are 6,520 bankruptcy cases on file, representing an 8 percent drop from the same seven-month period last year. July marked the fourth consecutive month of reductions in bankruptcy filings on the island.
When broken down, Chapter 13, or personal bankruptcies, were ahead of the other three categories, with a total of 533 cases filed in July. Still, the total filings represented a 36 percent drop in comparison to July 2010. So far this year, some 4,123 individuals have sought the court’s protection against creditors.
As per the data gathered by local research firm Boletín de Puerto Rico, 309 cases were filed in July under the Chapter 7 category, which implies a total liquidation of assets. The total for the year is 2,252 cases, or 55 percent lower than last year’s seven-month total.
Chapter 11 cases are on the rise, both for the month of July — when 14 cases were filed — and for 2011, with a tally so far of 112 filings. Chapter 11 cases allow the debtor to work through their financial situation while still managing their business.
Among the most notable Chapter 11 filings last month were those by European car dealership Euroclass Motors and Autos Vega, the island’s largest Ford Dealership, which listed about $16.6 million and $30.8 million in debt, respectively.
The last category, Chapter 12, remained stable in July, when four cases were filed. The Chapter 12 classification, open only to farmers, has been used 22 times so far this year, Boletín de Puerto Rico’s data shows.