More Companies File Repeat Bankruptcies; Prof Expects More 'Chapter 22' Filings
Repeat business bankruptcies are picking up in the first two months of the year.
Four of the 17 bankruptcies filed by public companies were repeats, compared to six repeat bankruptcies for all of 2011, Reuters reports. Such filings have earned the nickname “Chapter 22,” the story says.
Among the companies making a repeat trip to bankruptcy court are Hostess Brands and family-style restaurant company Buffets. New York University finance professor Ed Altman expects to see more companies return to bankruptcy court. Too many emerge from the process with continued operations problems and large debt loads, he says.
Hostess, for example, entered its first bankruptcy with $648.5 million in debt, and came out with more than $800 million, the story says.
“There is too much emphasis on getting out, and getting on with business rather than whether it is going to work,” Altman told Reuters.
