Chapter 11 Business Filings Likely to Rise

The Alix Partners Ninth North American Restructuring Experts Survey had some very interesting findings worth sharing. The survey is done with the people closest to restructurings - 165 senior attorneys, investment bankers, fund managers and other restructuring professionals who were polled across the United States about their outlook for the restructuring industry and related topics.

The survey had some interesting forecasts:

Expectations of a rise in Chapter 11 Filings - Although Chapter 11 filings have decreased since 2009, 47% of the restructuring experts surveyed predict an increase and 31% don't expect a change

The Outlook for Business Credit –41% of restructuring experts expect a tightening in the availability of revolving lines of credit and traditional bank loans, with 34% foreseeing no change. Consequently, an overwhelming majority (99%) of experts surveyed believe that the role of non-traditional lenders and investors will continue to grow in the term loan market. (I wonder what the 1% thought?)

Industries at Risk - When asked which industries could face the most distress in 2015, respondents said that the energy and resource sectors in the United States and internationally bear the greatest potential for restructuring activity, 79% and 78%, respectively.

Retail placed second in the U.S. (52%) and third globally (29%). The survey notes the rise of e-commerce has helped drive the uptick in retail bankruptcies.

Health care was cited third on the U.S. list (25%) and near the bottom on the global list (2%). The report cites Affordable Care Act reforms, along with other changes, for the difference between the two lists. In the U.S., those changes have upended established business models for healthcare companies, while governments in most other countries run or heavily regulate healthcare, creating more stability in those markets.

To download a copy of the report overview please click here

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