Bankruptcy

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The recent Chapter 11 filing of QVC Group, Inc. (QVC) underscores a trend that has been building over the past year: consumer-facing companies, facing a combination of leverage, shifting consumer behavior, and tightening credit conditions, are increasingly turning to the bankruptcy courts to restructure their obligations. As recent reporting has highlighted, the QVC’s filing follows mounting losses and ongoing pressure on its traditional television-based retail model, as consumers continue to migrate toward digital and social commerce platforms. Against this backdrop, the QVC filing reflects not only company-specific challenges but also broader structural shifts affecting legacy retail and media-driven commerce businesses.

Continue Reading QVC’s Chapter 11 Filing and the Continuing D&O Coverage Challenges in Bankruptcy

For those who, like me, watch bankruptcy filing developments for signs about the current and possible future state of the economy, recent data may be worrisome. Just Monday, the Wall Street Journal cited two recent auto parts companies’ bankruptcy filings as evidence of potential trouble in the U.S. credit markets, saying the developments and raising concerns that “something more profound is ailing American borrowers.” Consistent with these concerns, a recent report from Cornerstone Research shows that large company bankruptcy filings are indeed trending upward, with the largest increases in the most recent period. Signs are that these trends will continue going forward, as well.

Continue Reading Worrying Signs in Bankruptcy Statistics?

The accelerated pace of large corporate bankruptcy filings continued in the last 12 months, as high interest rates, inflation, and other factors continued to take their toll. According to a new report from Cornerstone Research, the number of filings during the second half of 2023 and the first half of 2024 were more than 40% above the long-term annual averages. The report, which is entitled “Trends in Large Corporate Bankruptcies – Midyear 2024 Update,” can be found here. Cornerstone Research’s October 2, 2024, press release about the report can be found here.

Continue Reading Cornerstone Research: Large Corporate Bankruptcy Filings Continue to Increase

According to a new report from Cornerstone Research, the number of large corporate bankruptcies “surged” in the first half of 2023 compared to the number of filings in the most recent years. The report, which is entitled “Trends in Large Corporate Bankruptcies and Financial Distress: Midyear 2023 Update” reports that the number of large corporate bankruptcy filings in the first half of this year already exceeds the total number of filings for the full year 2022. Cornerstone Research’s September 26, 2023, press release can be found here. The report itself can be found here.

Continue Reading Large Company Bankruptcy Filings “Surged” in Year’s First Half

One of the perennial issues involving D&O insurance coverage in the bankruptcy context is the question whether the directors and officers of the corporate debtor can tap the insurance policy to pay their defense expenses in connection with claims filed against them in their capacities as executives of the corporate entity. These issues have arisen once again in the bankruptcy proceedings of the corporate parent of Silicon Valley Bank, SVB Financial Group, where the bank’s directors and officers found themselves compelled to petition the bankruptcy court to lift the stay in bankruptcy in order for the bank’s insurers to pay the individuals’ defense expenses.

While there is nothing novel about the bankruptcy court’s order granting the stay, both the high-profile nature of the proceedings and the critical importance of the issues involved warrant taking a closer look at what unfolded in that case. A copy of the bankruptcy court’s May 22, 2023, order in the case can be found here. An August 23, 2023, memo from the Foley Hoag law firm about the court’s decision can be found here.

Continue Reading SVB Bankruptcy Court Lifts Stay to Allow Insurance to Pay Individuals’ Defense Expenses

There were more U.S. bankruptcy filings in 2020 than in any year since the global financial crisis, but the number of bankruptcy filings in the first half of 2021 returned closer to historical levels, according to a new report from Cornerstone Research. The report, entitled “Trends in Large Corporate Bankruptcy and Financial Distress: Midyear 2021 Update,” looks at bankruptcy filings involving private and public companies with assets over $100 million. The report can be found here, and Cornerstone Research’s August 25, 2021 press release about the report can be found here.
Continue Reading Cornerstone Research: Bankruptcy Filings Returned Closer to Historic Levels in 1H21

Due to the financial fallout from the COVID-19 pandemic, the number of U.S. bankruptcy filings by companies with over $100 million in assets was 84 percent higher during the first three quarters of 2020 compared to the same period last year, according to a new report from Cornerstone Research. The report, entitled “Trends in Large Corporate Bankruptcy and Financial Distress: 2005-Q3 2020” (here), shows that the increase in the number of bankruptcies was particularly pronounced for “mega bankruptcies” (involving companies with over $1 billion in reported assets). However, the report also suggests that the number of bankruptcy filings by companies with over $100 million in assets may have peaked in July. Cornerstone Research’s October 28, 2020 press release about the report can be found here.
Continue Reading Cornerstone Research: Business Bankruptcies Up Significantly in Year’s First Nine Months