Why A Drop In Bankruptcies Could Signal A Future Corporate Debt Crisis

Bankruptcy lawyers say the economy is experiencing the calm before the storm because oil companies, in particular, have mounting debt because of stagnant energy prices.

By Rhonda FanningAugust 27, 2019 10:57 am,

During the first half of 2019, corporate bankruptcies in Texas plummeted – in the Northern District, by 55%, and by 36% in the Southern District. That’s seemingly a good thing. But at the same time, Texas legal and financial firms are also hiring more bankruptcy experts. Why?

Mark Curriden, founder and senior editor of The Texas Lawbook, wrote in a recent article in The Houston Chronicle that the decrease in bankruptcies is actually a precursor to a brewing “financial storm.”

“What [bankruptcy lawyers are] seeing is not only is the economy starting to slow, they’re saying there’s so much debt out there and oil prices really haven’t recovered to what they thought.”

He also says other factors are having an effect.

What you’ll hear in this story:

– Why this potential debt crisis could hit the Texas oil industry, as well as the retail and commercial real estate sectors

– How this potential debt crisis echoes what led to the economic crisis in 2008

– How landowners, employees and more are affected when companies file for bankruptcy


Written by Caroline Covington.