The year started slowly for Chapter 11 bankruptcy filings in New York Eastern Bankruptcy Court, with fewer in January and February than in the first two months of 2019. Then came March.
Sixty companies filed for Chapter 11 during the month, up 58 percent from a year earlier and more than twice as many as in March 2009, when the stock market hit bottom at the end of the Great Recession.
Chapter 11 allows businesses to continue operating while they reduce debts, repay creditors and make a plan to become profitable again. Many businesses prefer filing for bankruptcy protection in the New York Eastern Bankruptcy Court, which encompasses New York City. The court receives the highest volume of Chapter 11 filings of any jurisdiction except Delaware.
There were only 25 business bankruptcies in March 2009, when the Dow Jones Industrial Average dropped to its lowest level since the start of the financial crisis. The spike in filings in New York City coincided with stay-at-home orders and mandatory business closures in the tri-state area.