Why corporate bankruptcies were up in 2023 despite the improving economy

PO1 William "Chip" Nagel
..."Companies turn to Chapter 11 for breathing room, re-organization
For many companies this year, like Bed Bath & Beyond, Rite Aid, Party City, WeWork, Bird, Envision Healthcare, Lordstown Motors, and many more, the bankruptcies were under Chapter 11, which is a type of court proceeding aimed at restructuring a firm, not totally shutting down.

"Chapter 11 gives a little bit of time for a company to get their act together and fix their problems," said Edward Altman, a bankruptcy expert at New York University.

The process allows a company to put debt payments on hold; a chance to sell off parts of the company that are not doing well; the ability to renegotiate lease commitments or escape them altogether. Chapter 11 also makes it easier to get new loans to try to find firmer financial footing. Basically, it's a way to hit the pause button and try to cut expenses enough to survive.

Some major companies, or entire industries, have gone through the Chapter 11 process. Nearly every airline in the U.S. has gone bankrupt and re-organized in Chapter 11. And, in 2009, General Motors did the same, cutting its debt and expenses and emerged a profitable company.

"And General Motors is seen as the playbook for many companies today," Altman said."...

PO1 William "Chip" Nagel good day Brother William, always informational and of the most interesting. Thanks for sharing, have a blessed day!

I can think of a few including shoplifting, credit card defaults, cost of business (i.e. labor)