Jonathan Young and Rick Kuebel, Co-Chairs of Locke Lord’s Bankruptcy, Restructuring and Insolvency Practice Group, were quoted by Law360 on the impact of the COVID-19 pandemic on increased Chapter 11 bankruptcy filings in the United States. The first wave of bankruptcy cases saw already-struggling companies filing and the next wave is expected to include otherwise healthy enterprises in financial distress due to the challenges of operating amid COVID-19. Young noted, "Even really healthy low-leverage businesses are going to have to find a way to manage the revenue hole.”
While the bulk of new cases have been centered in the retail and energy sectors, Kuebel speculated bankruptcies may begin to spread into all industries. "There are entire sectors that have been unrepresented so far in the filings to date where we kind of look into the crystal ball a little bit and have an expectation that many other sectors and many other geographic areas are going through significant distress and are likely to file cases," he said.
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