Bankruptcy Count Lowest Ever. Uptick Anticipated - Health Care Filings Lead Count

Jan. 08, 2015 11:33 AM ET1 Comment
George Putnam profile picture
George Putnam
1.29K Followers

Summary

  • Fewest Public Company Bankruptcies Ever in 2014; 3rd Year of Decline.
  • Energy Future Holdings Largest Chapter 11 of 2014--by Far.
  • Health Care/Medical Bankruptcies Represent 15% of Total.
  • Uptick Anticipated as Oil Prices Drop and Maturities Come Due.

2014's corporate bankruptcy count represents the fewest number of public* companies seeking U.S. Bankruptcy Court protection since at least 1980-and perhaps ever. Only 54 publicly traded companies filed for Chapter 7/Chapter 11 protection last year with a total of $71.9 billion in combined pre-petition assets**. While that figure is down from 2013's 71 bankruptcies, the asset count is a 69% increase over last year's $42.6 billion because of the $41 billion in pre-petition assets for the largest filing of 2014: Energy Future Holdings. NII Holdings (NIHD) ($9 billion) is the second largest Chapter 11 filing for the year, followed by Genco Shipping & Trading (GSKN) ($3 billion).

Last year's activity was unusual in several ways: The year began with one of the slowest periods for public filings, up-ending historical corporate bankruptcy benchmarks and pundit expectations with zero activity from early December 2013 until early February 2014. 2006 was the second-closest in terms of that type of slowdown. The late 2013/early 2014 decline was followed shortly thereafter by one of the busiest periods for large Chapter 11's when eleven public companies, each with pre-petition assets in excess of $300 million, sought U.S. Bankruptcy Court protection in March and April 2014. The roller coaster continued with activity again slowing dramatically and only sporadic large filings occurring since May 2014. The chart below reflects the ten largest Chapter 11 proceedings in 2014.

Largest Public Bankruptcies of 2014:

Company

Bankruptcy Date

Business Description

Assets** ($mils)

Energy Future Holdings Corp.

04/29/14

Electric Utility Company

$40,970

NII Holdings, Inc.

09/15/14

Wireless Comm. Provider

8,680

Genco Shipping & Trading Ltd.

04/21/14

Ocean Transport Vehicles

2,957

Momentive Perform. Materials

04/13/14

Silicone & Materials

2,694

USEC Inc.

03/05/14

Energy Company

2,266

Eagle Bulk Shipping Inc.

08/06/14

Ocean Transport Provider

1,723

Endeavour International

This article was written by

George Putnam profile picture
1.29K Followers
A graduate of both Harvard Law School and Harvard Business School, George Putnam, III first became involved with distressed securities as a lawyer in the late 1970s. Seeing the inefficient niche that bankruptcies and turnarounds were presented and researched, he founded New Generation Research, Inc. and began publishing The Turnaround Letter in 1986. Since then he has frequently been quoted in Barron's, The Wall Street Journal, New York Times, USA Today and other financial publications. In 1990, he was named investment advisor of the year by USA Today. In addition to his responsibilities at New Generation Research, Inc., Mr. Putnam also serves as a trustee for The Putnam Companies, a mutual fund group with over $100 billion in assets.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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