US bankruptcies surge 30% with 10.4 lakh cases

US bankruptcies surge 30% with 10.4 lakh cases
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First Published: Sun, Dec 21 2008. 11 46 AM IST
Updated: Sun, Dec 21 2008. 11 46 AM IST
New York: The world’s largest economy, the US, has seen a spurt in bankruptcy cases, with such filings jumping as much as 30% for 12 months ended 30 September compared to the year-ago period.
According to the Administrative Office of the US Courts, as much as 10.4 lakh bankruptcy cases were filed in federal courts across the country for the year ending 30 September.
The figure represents a 30% surge in comparison with just eight lakh filings in the same period a year ago.
For the nation’s Federal Judiciary, the fiscal year ends on 30 September. The latest bankruptcy data are for 1 October, 2007 to 30 September, 2008.
Interestingly, September was the month in which “the highest of any 12-month period” bankruptcy cases were filed after the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act in 2006.
It was September, when the Lehman Brothers filed for Chapter 11 bankruptcy protection, the largest bankruptcy filing in the US history with the Wall Street company holding over $600 billion in assets.
Washington Mutual having more than $300 billion holdings had also filed for bankruptcy under chapter 11 in the same month after it failed to save itself from the ongoing financial downturn.
As per the statistics as much as 757 bankruptcy cases were filed in the month of September under Chapter 11 in business category filing before the US federal courts located across the country.
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganisation under the bankruptcy laws of the country.
Bankruptcy under this chapter is available to any business, whether organised as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities.
While, for year ended 30 September total business filing touched 38,651, a growth of 49% from 25,925 cases in September 2007.
In past times, the ongoing global financial crisis has forced so many big firms to seek protection from the government by way of filing bankruptcy cases before the courts.
In December itself newspaper industry in the US has seen the biggest victim when Tribune Compnay filed for bankruptcy protection.
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First Published: Sun, Dec 21 2008. 11 46 AM IST