By David G. Hicks*

*Attorney at Law, Certified Bankruptcy Specialist, Debt Relief Agent

            Currently, bankruptcy case filings are at historic lows and are down whether analyzed by bankruptcy chapter type or by geographic region.  Nationally the economy is doing quite well, and regionally here in the Midwest, it’s doing even better. 

            However, the American economy is huge and complicated enough that some sector is always up and likewise, some sector is always down.  So, who’s down and are there trends?

            As observed by Jeffrey A. Krieger of Greenberg and Glusker in his short article “Small Enough to Fail”, published in a recent edition of Lexology, it’s retail chapter 11s that are up, meaning therefore that it’s this sector that is down.

            For example, in December it was Deb Shops and Delia’s.  January of this year saw filings by Wet Seal and Body Central.  Radio Shack filed in February as did Cache.  April brought a shower of filings, including Simply Fashion, Fresh Produce and Frederick’s of Hollywood. 

            What does this apparent trend portend for the future?  It seems to me that while not every single one of the approximately 7,000 stores that made up these bankruptcy chains will be closing, it nevertheless indicates cutbacks and various painful restructurings. That means there will be commercial landlords whose leases are broken, malls with vacancies and employees laid off.  This disruptive ripple will likely result in more bankruptcy filings by others who have felt this retail impact. 

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