The latest bankruptcy filing data is being described as “a calm before the storm,” as businesses have been turned upside down because of the coronavirus pandemic.
According to data provided by Epiq Systems, the American Bankruptcy Institute (ABI) reported that total commercial Chapter 11 bankruptcy filings for the first quarter increased 14% year-over-year. The figure moved from 1,500 cases to 1,709 commercial Chapter 11 filings recorded through March 31.
Overall commercial filings rose 4% year-over-year during the first quarter, according to ABI, climbing from 9,481 total commercial filings to 9,817 cases.
However, officials noticed that total bankruptcy filings in Q1 actually declined year-over-year.
ABI reported that total bankruptcy filings decreased 5% to 177,198 from the 187,325 filings during the same period of 2019.
The latest data also showed consumer bankruptcy filings dropped 6% over the first three months of 2020 to 167,381 from the 177,844 consumer filings during the same stretch last year.
But ABI executive director Amy Quackenboss expects future bankruptcy data installments to show much different situations.
“The first quarter filings represent a calm before the storm of the financial distress caused by the COVID-19 pandemic,” Quackenboss said in a news release. “Consumers and businesses face growing financial challenges due to the pandemic, and bankruptcy provides a vital safe harbor from their mounting debts.
“We anticipate business filings to start rising this month and consumer filings to start to accelerate in early summer,” she continued.
Looking at just March information, total bankruptcy filings sunk 15% to 62,847 cases from the 73,522 total filings registered a year earlier.
Total commercial filings in March also decreased, softening 5% to 3,167 from the 3,317 business filings recorded in March of last year.
ABI determined the average nationwide per capita bankruptcy filing rate for the first three months of 2020 increased to 2.29 (total filings per 1,000 per population) from the 2.21 filing rate of the first two months of the year.
States with the highest per capita filing rates (total filings per 1,000 population) during Q1 included:
1. Alabama (5.47)
2. Tennessee (5.05)
3. Mississippi (4.45)
4. Georgia (4.34)
5. Arkansas (3.56)
ABI has partnered with Epiq Systems, a leading provider of managed technology for the global legal profession, in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
For many dealership employees, working from home might be a bit unknown since so many regular activities happen at the showroom.
To help store managers and their employees during the coronavirus pandemic, Dealer Profit Pros founder and president Kenny Atcheson produced a free, downloadable tip sheet to help dealers who find themselves in the unusual position of having employees working from home.
“There are a number of factors and distractions that can take place when working from home instead of the dealership or office. Although the dealer may work remotely on occasion, their employees are not used to it,” Atcheson said.
“Rather than let you suffer through it, Dealer Profit Pros provided the following tip sheet to share with your employees that will help guide them through how to avoid common distractions and pitfalls of working from home,” he continued.
Some examples include:
• How to stay focused with so many interruptions (i.e. family, television, social media)
• How to prepare for work so you mentally feel like you are actually “at work.”
Go to this website to download the tip sheet.
Editor's Note: NIADA made content connected with this webinar and other strategic material to help dealers available on a special website located at COVID19.NIADA.com.
The National Independent Automobile Dealers Association understands one of the most valuable assets operators ever can have — cash — has been taken to unprecedented importance during the coronavirus pandemic.
And NIADA wants members to take full advantage of federal assistance, so independent dealerships can improve their cash positions.
NIADA, in partnership with CliftonLarsonAllen, is hosting a special, free webinar titled, “The CARES Act and its Impact on the Independent Dealer.” The session is set for 2 p.m. ET on Wednesday.
NIADA’s Steve Jordan, Shaun Petersen and Chuck Bonanno will be joined by CLA’s David Wiggins to discuss the key provisions of the new bipartisan relief legislation, including the small business loans, and what you should be doing now to take advantage of those opportunities.
“David will also give you some business and cash flow planning strategies to help you navigate your dealership through these trying times,” NIADA added.
Petersen shared a brief explanation of the CARES Act here and in the video available at the top of this page.
Registration for the free webinar can be completed here.
The U.S. Senate Committee on Small Business and Entrepreneurship also posted a Q&A about the Paycheck Protection Program that can be reviewed here.
Editor's note: Due to unprecedented demand for this information, Agora Data is hosting another free webinar at 1 p.m. ET on Thursday. Registration can be completed here.
Agora Data is offering a free informational webinar for independent and buy-here, pay-here dealers that are suddenly facing unprecedented cashflow challenges stemming from COVID-19.
Agora senior vice president of sales Chris Barry will be discussing four critical financial strategies that dealers can leverage to keep their businesses intact during the session scheduled for 3 p.m. ET on Wednesday. Barry will elaborate about:
• Strategies for times of increased uncertainty
• How dealers can reduce risk and manage cashflow
• How to identify factors affecting your portfolio’s value
• Liquidity options that any BHPH dealership can access
“Over the course of the past few weeks, the coronavirus (COVID-19) has caused increased levels of uncertainty for many BHPH dealerships,” Agora said. “Subprime loans can be subject to increased levels of risk when there is more volatility in the economy. With increased levels of uncertainty in the market, access to information and data is paramount and affords control to BHPH dealers.
“Agora is giving BHPH dealerships exclusive, free access to extremely powerful tools to evaluate critical loan components, track portfolio changes, compare loan valuations, and access various sources of liquidity,” the company went on to say.
Dealers can register for the free webinar on this website.
Stemming from calls for social distancing to curtail the spread of the coronavirus, the Georgia Independent Automobile Dealers Association (GIADA) is hosting a webinar so operators can meet their continuing-education requirements needed for state license renewal by the end of March.
Instead of its typical in-person class, GIADA said it's orchestrating the webinar on Friday.
“GIADA is taking extra care and precautions to help prevent the spread of COVID-19,” the association said in a post on its website. “Our staff is dedicated to staying updated on and vigilant with important procedures from the CDC, World Health Organization, Georgia Department of Public Health and local authorities, all of whom are helping us accomplish this.”
GIADA noted that the association will be sending a legal document for the dealership to sign and return that the designee participated during the webinar.
“Once we receive the document, we will email your certificate to you,” GIADA said. “Not completing a (continuing education) is not an option, so we are making every effort to ensure all dealers can take the class in a timely manner and renew their dealers license by March 31.”
GIADA officials mentioned another element of its operations that being modified because of the ongoing crisis.
“Please mail or scan your titles to the GIADA Office and order your TOPS online whenever possible to prevent our office from being overcrowded until the current situation is cleared by the CDC,” association officials said. “This will protect you and our staff. We want to keep the GIADA office open, so we need to take these precautions.
“Thank you for your understanding. As always, we want to take care of the dealers in Georgia,” GIADA added.
For more details, go to giada.org.
On Monday, the American Bankruptcy Institute (ABI) reported nearly steady movements in total and consumer filings for February, but experts fully anticipate significant changes coming as a result of the COVID-19 pandemic impact on the economy.
According to data provided by Epiq Systems, total bankruptcy filings ticked up 0.1% to 56,182 in February from the 56,144 cases filed in February of last year. Consumer filings edged 0.3% higher in February to 53,098 from last February’s consumer filing total of 52,941.
ABI also reported total commercial Chapter 11 filings in February 2020 decreased 20% the same period last year, Inc. The 547 commercial Chapter 11 filings in February were down from the 685 commercial Chapter 11 filings in February of last year.
Officials determined total commercial filings came in at 3,084 in February, representing a 4% decrease from the 3,203 business filings recorded in February of last year.
“As businesses close and the supply chain endures disruptions due to the COVID-19 coronavirus, bankruptcy provides distressed businesses and consumers the financial shelter they need in these challenging times,” ABI executive director Amy Quackenboss said in a news release.
“While the statistics might not show the immediate effects, we expect filings to increase as a result of the financial impact of the COVID-19 pandemic,” Quackenboss added.
ABI hosted a webinar last week featuring a panel of experts that shed light on the impact, and likely reaction, from various sectors of the economy, as well as suggestions on what may be around the corner in the world economy. Go to this website to watch a replay of the webinar.
Looking at the data based on a sequential comparison, officials indicated total bankruptcy filings fell 3% in February from January’s total of 58,150 filings. They said total noncommercial filings also declined 3% from the previous month, from 54,615 filings in January to 53,098 filings in February.
ABI pointed out the February commercial Chapter 11 filing total of 547 represented a 13% decrease compared to the previous month’s commercial filing total of 630. February’s 3,084 commercial filings also dropped 13 percent versus the 3,535 filings recorded in January.
Officials went on to mention the average nationwide per capita bankruptcy filing rate in February was 2.21 (total filings per 1,000 per population), a slight decrease from January’s rate of 2.25. Average total filings per day in February were 2,957, a slight increase from the 2,955 total daily filings recorded in February of last year.
States with the highest per capita filing rates (total filings per 1,000 population) in February included:
1. Alabama (5.33)
2. Tennessee (5.00)
3. Georgia (4.49)
4. Mississippi (4.16)
5. Arkansas (3.50)
ABI has partnered with Epiq Systems, a leading provider of managed technology for the global legal profession in order to provide the most current bankruptcy filing data for analysts, researchers and members of the news media.
