Chapter 11 proceedings in the U.S. in 2021 dropped to the lowest number in a decade, according to the latest Bankruptcy Report from Lex Machina (Menlo Park, Calif.), a LexisNexis company. The just-released report focuses on the period from 2017 to 2021 and surveys trends in case filings, courts, judges, law firms, parties and timing metrics.
“This was a fascinating report to produce, both because it showcases data and analytics from our newest court system, but also because the analytics revealed some powerful insights and intriguing trends,” said Laura Hopkins, Lex Machina’s bankruptcy legal data expert and editor of the report. “Not only could we see the quantifiable effect the pandemic and its aftermath had on Chapter 11 proceedings, but our filters also highlighted the different effects the pandemic had on bankruptcy filings depending on the type of debtor and total amount of liabilities.”
Findings from the report include:
- After a brief spike in 2020, the number of Chapter 11 bankruptcy proceedings — which frees the company involved from the threat of creditor lawsuits while reorganizing its finances — filed in 2021 hit 4,526 cases, the lowest number of any year in the past decade.
- The most active court for Chapter 11 proceedings over the last five years was the Court of Delaware. (This is likely because that state’s business-friendly laws make it the “incorporation capital of America,” with more than half of the nation’s Fortune 500 companies choosing to make it their legal home.)
- The median time for a Chapter 11 plan to be confirmed was 393 days during the period covered by the report.
Lex Machina is offering a full copy of the report with registration.