Economy

Report: Puerto Rico’s bankruptcy filings drop 2% in ’16

The U.S. Bankruptcy Court in San Juan. (Credit: © Mauricio Pascual)

The number of bankruptcy cases filed in Puerto Rico during 2016 dropped by 2 percent year-over-year, with a total of 10,221 filed, research firm Boletín de Puerto Rico disclosed Wednesday.

The number of filings for December 2016 reached 741, or 16 percent lower when compared to the same month in 2015, which ended with 881 cases on file.

When broken down by case categories, Chapter 13 and Chapter 7 cases were down 1 percent and 5 percent, respectively, for the year, the firm noted. There were 72 fewer Chapter 13 — or personal bankruptcy cases on file — and 238 fewer Chapter 7, or total liquidation filings, in 2016.

Meanwhile, the Chapter 11 and 12 categories showed increases of 28 percent and 56 percent, respectively, Boletín de Puerto Rico informed.

In terms of total debt associated with all of 2016’s filings, the number exceeded $1.8 billion, which is a 20 percent drop from the $2.3 billion on record for 2015.

When broken down by types of debt, secured and prioritized debt showed increases of 4 percent and 13 percent, respectively. Secured deb reached $926.4 million in 2016, while prioritized debt totaled $63.4 million.

Unsecured debt dropped by 37 percent to $823.9 million, which is good news for creditors who will lose less in the bankruptcy process.

While individual debt dropped by 3 percent during the year to a little more than $1 billion, commercial debt dropped by 34 percent to $805.7 million, the firm’s report showed.

Commercial filings showed a slight increase in 2016, with restaurants leading the numbers. Construction contractors, doctors, grocery stores, beauty salons, bakeries and auto shops followed that sector.

The year’s biggest commercial bankruptcy filings included: American Parking Systems, which cited $51.7 million in obligations; Redondo Mercybelle, with $51.3 million in debt; and Komodidad Distributors Inc., with $47.7 million in outstanding obligations.

Author Details
Business reporter with 25 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other areas of the economy.

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