Corporate Bankruptcies Trending Higher, New Report Contends    
Industry News
Corporate Chapter 11 bankruptcy filings will rise this year and again in 2007, climbing from 80 public companies that filed in 2005 to 88 this year and 100 next year, according to a new report from the corporate advisory and restructuring group at accounting firm PricewaterhouseCoopers. The increase will mark the first time since 2001 that corporate filings have increased, the report notes.
High energy prices, increased borrowing costs, a tighter labor market and a slowing of personal consumption by consumers stung by a slowing housing market all will contribute to the U.S. bankruptcy up-tick, the report notes.

Industries that will be hardest hit by bankruptcy filings include auto equipment manufacturing, plastics, paper products, computer and electronics’ manufacturing and retailing.
Early this year, Pricewaterhouse was expecting 95 Chapter 11 filings this year. Its latest report, The Phoenix Report: a Study of Bankruptcies in 2005-2006, has scaled that figure back to 88 because of faster than expected economic growth in the beginning of 2006 and lowered expectations for corporate inventories this year.

Only 28 public companies filed for bankruptcy protection in the first five months of this year compared with 36 in the same period last year, the report notes.

The bursting of the Internet bubble at the start of the this decade made 2001 the leader, in terms of corporate bankruptcy filings, with 257, the report notes. Corporate bankruptcies continued at high levels in 2002, when 189 were filed, and 2003, when 189 were filed, but trended down from there to the 80 filed last year, the lowest level since 70 were filed in 1994.

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