(Jan. 1-September 30), a 13 percent decrease from the 921,927 total filings during the same period a year ago. Total commercial filings during the first nine months of the year were 34,338, representing a 23 percent decrease from the 44,804 filings during the same period in 2012. Commercial chapter 11 filings also fell during the first nine months of 2013 as the 5,171 filings represented a 14 percent decrease from the 5,999 commercial chapter 11 filings during the first six months of 2012. Nationwide in contrast, bankruptcy filings nearly doubled between 2007 and 2010. Nearly 1.6 million filed for bankruptcy protection in 2010 alone.
Why is this? American Bankruptcy Institute (ABI) Executive Director Samuel J. Gerdano reports that “Today’s figures confirm a new normal of reduced bankruptcies, as consumers and businesses continue to deleverage in a sustained low-interest-rate environment”. The trend is expected to continue throughout the rest of the year. As the economy has strengthened in the past couple of years bankruptcy filings have declined, offering another piece of evidence that the economy is in fact getting stronger.
Western New York (Buffalo and Rochester, New York area) bankruptcy attorney Jeffrey Freedman has a slightly different perspective. Mr. Freedman is quoted in Business First of Buffalo that “low bankruptcy filings are not necessarily a sign that all is right with the world. There are other influences besides low interest rates and conservative consumer spending that keep people out of the bankruptcy courts.”
Although bankruptcy filings have declined, auction sales continue outside of bankruptcy. Commercial and industrial auction sales continue to be a successful and popular method of liquidating assets. By selling at auction, a seller receives a fair value for what their assets are worth at a particular moment in time. The seller is not forced to pre-price assets for conventional sale and therefore not risking setting the ceiling too low. Auctions also allow the buyer to pay what they feel is the right price, making a mutually agreeable sale for both parties.
Blackbird Asset Services is a national appraisal and auction company based in Buffalo, NY that specializes in bankruptcy auction sales and secured creditor auction sales. Blackbird also conducts certified appraisals for commercial and industrial assets for lenders and other business professionals.