In the first four months of the current year, the number of bankruptcies in the United States was at a decade high

[ad_1]

Mumbai: From the data obtained, it can be said that due to the economic recession, American companies are making records in filing bankruptcy after the widespread retrenchment of employees in Corporate America for the last six months.

The current year is witnessing the highest number of filings under Chapter 11 by US companies in the past decade.

According to a report by S&P Global, by April 2023, more than 230 US companies have filed for bankruptcy. This is the first time since 2010 that such a large number of filings have been done in the first four months of a year.

The bankruptcy filings are a sign of just how financially vulnerable American companies are becoming. The high number of bankruptcies is also indicative of the challenges facing the business sector in the US.

Due to sluggish economic conditions, rapid rise in interest rates and persistent high inflation, many companies are heavily indebted and debt servicing is deteriorating.

Even the concessions given by the government during the Corona period have now disappeared. Debt-ridden companies are laying off a large number of employees to cut costs.

The report noted that the largest number of bankruptcy filings involved companies that manufacture and provide entertainment products. There are other companies running retailers and restaurants in it. The situation becomes most challenging for companies in this sector during economic downturns. It is worth mentioning that recently the spate of banking crisis in America and Europe had spread to many countries.