Bankruptcy Law, Business Bankruptcy

The Impact the Coronavirus has had on Bankruptcy Filings in Miami Beach

The economic impact caused by the coronavirus (COVID-19) pandemic has been substantial throughout the country, and Miami Beach is not excluded. Countless businesses have been forced to close temporarily and many even permanently. While technically the number of bankruptcies were down at the end of 2020 nationwide, financial experts fear that the number of bankruptcy filings will increase over the next several years.  

While the number of consumer bankruptcies were down nationwide, the number of Chapter 11 business bankruptcies saw an increase of 18.7 percent when compared to 2019. This form of bankruptcy is normally used by businesses that hope to stay in operation through the Chapter 11 bankruptcy process that allows them to renegotiate their debts. Several larger businesses, including Neiman Marcus and J.C. Penney filed for Chapter 11 in 2020.  

Specifically, in Florida, a total of 37,776 bankruptcies were filed in 2020, which is 19.26 percent lower than the 46,786 filed in 2019. Of all the bankruptcy cases filed in 2020, businesses accounted for four percent of these cases. This number may seem small, but business bankruptcies tend to have a significant effect far past the bankruptcy case alone, including the effect these closures and filings have on the individual employees who lost their job as a result.  

Many times, a ripple effect can be seen on other businesses after one or more close.  

According to figures from the U.S. Courts Administrative Office, a total of 7,430 bankruptcies were filed in Miami-Dade County in 2020. This figure is slightly less than the 8,705 filed in 2019.  

While consumer bankruptcies were down in Miami-Dade County, the number of business bankruptcies saw a slight increase. It is reported that 322 Miami area business bankruptcies were filed in 2020, as compared to 215 filed in 2019. Of these cases filed in 2020, 188 of them were filed under Chapter 7, commonly referred to as a liquidation bankruptcy. Only 129 Chapter 7 business cases were filed in 2019.  

Miami-Dade County did see an increase in the number of Chapter 11 bankruptcy case filed in 2020. Approximately 120 were filed in 2020, as compared to the 62 filed in 2019.  

Individual consumer bankruptcies in Miami-Dade County did not see the same increase, however. According to court filings, a total of 7,108 non-business consumer bankruptcy cases were filed in 2020, as compared to the 8,490 filed in 2019. Of these cases, 4,841 were Chapter 7 filings and 2,260 were Chapter 13 filings. In comparison, 5,067 Chapter 7 cases were filed while 3,414 Chapter 13 cases were filed in 2019.  

Despite the decrease between 2019 and 2020, financial experts predict these numbers will continue to increase through 2021 and beyond. As the COVID-19 pandemic continues, more and more businesses and individuals will continue to feel the economic impact of this crisis.  

Please click here to read more.  

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.   

Business Bankruptcy, COVID-19

Wave of COVID-19 Bankruptcies Hitting U.S. Bankruptcy Courts

As the country nears the one-year mark since the start of the COVID-19 pandemic, the financial effects are continuing to have effect on consumers and small businesses. The pandemic forced the shutdown of countless businesses throughout the country, and the expected wave of impending Chapter 11 bankruptcy cases is only now beginning to hit the nation’s legal system.  

According to court records, the number of Chapter 11 bankruptcy filings were up by approximately 20 percent, when compared to filings in 2019. These numbers are only expected to grow. 

Certain sectors of the economy have been hit much harder than others. According to figures from New Generation Research, restaurants, retailers, entertainment companies, and real estate firms have filed for bankruptcy protection more now than in previous years. The number of bankruptcy filings made by entertainment companies quadrupled in 2020 alone. The number of filings has tripled for oil and gas companies, while doubling for restaurant owners, retailers, and real estate companies. 

Thus far, more than $3.7 trillion in federal stimulus money has been issued in an effort to help offset the damage caused by the COVID-19 pandemic. Even with this money and the possibility of more coming in the future, many businesses have not been able to survive.  

The true effects of the pandemic may not be seen for several years. After the Great Recession of 2007, the bankruptcies that resulted were not filed until 2010, a few years after the start of the recession 

The widespread shutdowns brought on by COVID-19 have hit the restaurant industry hard, and financial experts worry that they may be the hardest hit from the financial crisis. The route these businesses will take can vary depending on what the businesses owners have decided to do. Many of them have already made the decision to close down completely in lieu of pursuing a business bankruptcy. Others have chosen to file for Chapter 7 bankruptcy, meaning that their assets will be liquidated and used to pay down the debts, leaving the restaurants permanently closed. 

With so many people working from home, the need for office space has also dropped off dramatically, leading to a drop in real estate values for both retail and office spaces, hitting the real estate sector, as well. 

Some of the larger chain retailers who have filed for Chapter 11 bankruptcy over the summer of 2021 include J. Crew, Neiman Marcus, J.C. Penney, Brooks Brothers, and Lord and Taylor. According to S&P Global, there was an average of two corporate bankruptcy filings per day in the months of June and July.       

Not only have retailers been hit hard but their suppliers have, as well. An example of this is Country Fresh, a supplier of fresh fruit snacks, sides, soups, and salads to convenience stores, filed for Chapter 11 bankruptcy mid-February 2021. This filing represents just one of the many suppliers who have been hit hard and are still struggling from the pandemic. It remains to be seen whether more filings will follow as 2021 progresses.   

Please click here to read more.  

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.   

 

Business Bankruptcy, COVID-19

Stimulus Relief Fails to Save Hundreds of Businesses

The financial ramifications of the COVID-19 pandemic have been significant for countless businesses throughout the United States.  At the start of the pandemic, federal stimulus funds were issued in various forms to help businesses survive the economic crisis. However, as the virus continues, many of these businesses are being forced to close.  

According to a Wall Street Journal analysis of legal filings and government data, over 300 U.S. companies that received approximately half a billion dollars in stimulus relief have also filed for bankruptcy this year. These 300 companies employ a total of 23,400 workers who are being adversely affected.  

Business Bankruptcy, Coronavirus, COVID-19

Growing Number of Retailers and Restaurants Are Folding as the Covid-19 Pandemic Continues

Retailers and small businesses have been hit hard by the pandemic, after facing a brutal 2019.  Now a growing number of businesses and restaurants are folding, as Covid-19 continues to wreak havoc on the retail, restuarant industry and the global economy.

Here are the latest ‘big-name’ companies to file bankruptcy since mid-March.

Ruby Tuesday is the most recent restaurant to file for Chapter 11 bankruptcy.  It will permanently close 185 restaurants while it restructures.

Bankruptcy Law, Business Bankruptcy

Cheesecake Factory, Dave & Busters & Outback Steakhouse Facing Bankruptcy

The coronavirus (COVID-19) pandemic has hit countless businesses hard, but the restaurant industry has been hit particularly hard.  According to a recent report from S&P Global, some popular large chain restaurants have made the list of businesses struggling to stay afloat.

Three restaurants are going through serious financial difficulties, namely the Cheesecake Factory, Dave & Busters and Bloomin’ Brands, the parent company of Outback Steakhouse.