2021 Chapter 11 Filing Trends from Q1 and Q2
Coming off a record-setting year of chapter 11 filings in 2020 as the Covid-19 pandemic swept the globe and affected multiple industries, our First Day team analyzed the 2021 chapter 11 filing trends from Q1 and Q2 in our midyear report. The first half of 2021 trended well below historical averages, with a low point in May. Compared with the busiest second and third quarters of 2020 where consumer discretionary sector cases and, in particular, brick-and-mortar heavy companies, were filing with unprecedented frequency, 2021’s first-half consumer discretionary cases dropped by almost half. Real estate was the only industry to see an increase in filings, as compared with chapter 11 filing trends from both the first and second halves of 2020, as hotels and commercial real estate struggled. Financials also had an increase of less than 20% in filings in the first half of 2021 as compared with the second half of 2020, but a decrease of about 20% as compared with the first half of 2020.
A big story from 2020 was also a huge increase in larger bankruptcy filings, one of the many chapter 11 filing trends which did not continue into 2021. There were only 10 $1B bankruptcies during the first half of 2021, as compared with 57 over the full-year period of 2020. The dropoff in filings by companies with more than $1B in liabilities fell off by about 60% as compared with the second half of 2020, and 75% compared with the first half of 2020. All liability ranges saw less action in the first half of 2021 relative to both halves last year, with cases involving more than $500 million in liabilities dropping most vastly, cases in the $10 million to $50 million and $100 million to $500 million ranges falling less significantly, and filings in the $50 million to $100 million range increasing slightly.
To read our full 2021 chapter 11 filing trends from Q1 and Q2 including analysis on chapter 11 filings in the real estate, financials, consumer discretionary, healthcare, consumer staples, industrials, energy and materials industries click through and download our 2021 Midyear Review: