P.R. bankruptcy cases down 18.3% through May vs. same 5-month period in ’20
The U.S. Bankruptcy Court for the District of Puerto Rico received 1,718 petitions from January to May, when filings were down 18.3% in comparison to the same five-month period in 2020, according to information provided by local research firm Boletín de Puerto Rico.
When broken down into categories, about 711 of those petitions were under Chapter 7, through which individuals, corporations or self-owned businesses seek a total liquidation of assets. The number jumped by 41.4% year-over-year during the first five months of this year.
Under this arrangement, the bankruptcy court appoints a trustee who oversees the liquidation of assets, so the debtor is freed from their obligations.
Boletín de Puerto Rico’s research also confirmed that from January to May 2021, attorneys were the most active in seeking bankruptcy protection, with a combined reported debt exceeding $2.8 million split between five professionals. Bakeries followed, with $1.2 million in debt among three establishments, and three farmers filing to address $1.1 million in obligations. Seven restaurants sought Chapter 7 protection with a combined $923,070 in debt, and three hotels followed, with $875,158 in accrued debt.
So far in 2021, a total of 89 businesses have sought bankruptcy protection from the court, representing a 7.2% increase year-over-year. San Juan, Bayamón, Caguas, Carolina, and Hatillo were the five towns with the highest percentage of commercial bankruptcy filings.