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The number of businesses filing for bankruptcy in 2009 increased 38% over the prior year, providing a measuring stick of the widespread economic crisis that likely will continue to put pressure on companies in 2010.
Last year, 89,402 companies filed for bankruptcy protection, compared with 64,584 that sought shelter from creditors in 2008, according to new data from Automated Access to Court Electronic Records, or AACER, a private firm that tracks bankruptcy filings.
Corporate bankruptcy filings are likely to remain at elevated levels in 2010, experts say.
"I don't think flipping the calendar means anything," said Pat Lagrange, chairman of the Turnaround Management Association. "As long as there are certain economic conditions, there is a substantial risk of business insolvency and bankruptcy for many companies."
Tight credit, high unemployment and troubles in the real-estate market will likely prevent commercial bankruptcies from receding back to their pre-2009 numbers, said Lagrange, a managing director Carl Marks Advisory Group LLC.
The number of companies filing for bankruptcy did continue to increase last month, albeit at a slower rate than earlier last year.
Business bankruptcy filings in December 2009 rose 13% compared with the same month in the prior year. Commercial bankruptcies last month also jumped 3% compared with November 2009.
Those figures indicate that bankruptcy filings may be leveling off.
Lagrange said industries such as retail, commercial real estate, and oil and natural gas could all see a number of bankruptcies in 2010.
Weak consumer spending, a result of high unemployment and foreclosures, could also affect businesses further up the supply chain, such as those in transportation sector, he said.
"If people aren't buying, driving and building, then every business who supplies the inputs of that production could ultimately get hurt," Lagrange said.
The total number of bankruptcies, including both personal and business filings, rose 32% in 2009, compared with the prior year, according to the AACER data. The total number of bankruptcies eclipsed 1.44 million last year.
The swell of bankruptcies particularly hit states in the West.
The total number of bankruptcy filings in Arizona increased 77% in 2009 from the prior year. Nevada, Wyoming, California and Utah all recorded at least a 50% increase in filings.
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