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Bankruptcies in the United States are on track to hit their highest levels in 10 years as the coronavirus pandemic continues to quell economic activity and keeps many Americans from re-engaging fully with the economy.
A total of 424 companies have gone bankrupt this year as of Aug. 9, S&P Global Market Intelligence, a business information company based in New York, reported earlier this month. “This exceeds the number of filings during any comparable period since 2010 as the U.S. economy contracts and the coronavirus takes its toll on numerous industries, especially those relying on consumer spending,” said the report, by Tayyeba Irum and Chris Hudgins.
S&P Global Market Intelligence’s bankruptcy analysis includes public companies or private companies with public debt, the report noted. “Public companies included in the list of companies with public debt must have at least $2 million in either assets or liabilities at the time of the bankruptcy filing. In comparison, private companies must include at least $10 million.”
Consumer-focused companies have been the hardest hit. Among the companies that have recently declared bankruptcy are Men’s Wearhouse owner Tailored Brands Inc., Neiman Marcus Group, J.C. Penney Co. Inc., Lord & Taylor LLC and Stein Mart Inc.
“Some of the companies that sought bankruptcy protection were already facing issues before coronavirus, and the crisis accelerated the pressure, experts said,” the report noted.