First Day: 2022 Year in Review Whitepaper

First Day by Reorg publishes timely alerts and expert analysis of new chapter 11 cases. The team also publishes regular special reports including the First Day Weekly and twice-yearly reports; the Midyear Review and the Year in Review. Below is an excerpt of the 2022 Year in Review whitepaper which you can download here. To request trial access to Reorg, click here.

Major Industry Developments & Highlights

• In 2022 there was an 18% increase in filing frequency from the first half to the second half, with December being the busiest month of the year.
• Energy and consumer discretionary filings, which set record highs in 2020, fell steeply in 2021 and were down further to record lows in 2022.
• From 2021 to 2022, chapter 11 filing frequency dropped 4%; excluding the real estate sector, this decrease was just 1%.
• The financials sector took the largest share of the year’s billion-dollar filings, which have historically been led by energy and consumer discretionary filings.

Market Overview

• The sector with the biggest increase in cases with more than $100 million in liabilities was the financials sector, and the sector with the biggest increase in cases with more than $10 million in liabilities was the consumer staples sector.
• Crypto companies became a trend after the midyear, with FTX’s free-fall accounting for the largest case, along with smaller filings from Core Scientific, BlockFi, Celsius Network and Voyager Digital.
• Inflation and supply-chain issues were running themes for 2022’s chapter 11 filers.
• Noted pockets of increased bankruptcy activity were construction filings, especially in the first half of the year, and New York-based hotels filing toward the end of the year.
• The year had an increased prevalence of DIP facilities provided by third parties, as well as DIPs seeking interim approval of rollups.
  

Case Size
Turning to the size of 2022’s cases, the year had 21 billion-dollar chapter 11s, 15 of which filed in the second half. The financials sector – driven by crypto – led these cases, accounting for one third of the total. The year’s breakdown by liabilities for each month of the year is shown.

Download the Frist Day by Reorg 2022 Year in Review whitepaper here to read more trends and insights into U.S. bankruptcy filings throughout 2022.