South Plainfield, NJ, May 14, 2013 – Credit2B, a Smyyth Company, a leader in business credit information and accounts receivable management technology and services that include industry business analysts, reported a national decline in US bankruptcy filings for both calendar year 2012 and the first quarter of 2013 as evidenced by data released by the Administrative Office of the U.S. Courts and reinforced by business bankruptcy filings recorded within in the Credit2B trade database. Concurrently, a review by a Credit2B senior analyst of regional bankruptcy data for the most recent two quarters revealed that the impact of SuperStorm Sandy has not translated to an increase in business bankruptcy filings in the Northeastern states that were hit the hardest.
According to statistics released by the Administrative Office of the U.S. Courts, the number of business bankruptcies filed in the federal courts in the 12-month period ending December 31, 2012, totaled 40,075, down from the 47,806 bankruptcies filed in CY 2011, a 16 percent decrease. The number of business bankruptcies filed during the first quarter of CY 2013 (three month period ending March 31, 2013) was 8,512, down over 22 percent from the 10,998 filings in the first quarter of CY 2012.
This downward bankruptcy filing trend is reinforced by an analysis of the Credit2B U.S. business-to-business trade payments database, which includes over 100 million payment experiences representing a cross section of 5 million companies covered by Smyyth’s Credit2B network members. The data reveals a continuing pattern of decreasing business bankruptcy filings in 2012 versus 2011 and continuing into 2013.
Additionally, an analysis was undertaken by Credit2B veteran industry credit analyst staff of U.S. Court published bankruptcy statistics for the fourth quarter of Calendar Year 2012 and the first quarter of Calendar Year 2013 to determine the impact of Superstorm Sandy on businesses in the Northeast states that were hit the hardest.
“A review of Q4 2012 and Q1 2013 business bankruptcy statistics from the four courts that cover the regions most affected by “Superstorm Sandy” failed to show any meaningful increases in filings,” stated Bob Carbonell, Executive VP and Chief Credit Officer at Credit2B. The courts that cover Connecticut, New Jersey, and the Southern and Eastern Districts of New York actually showed sharp declines in business bankruptcies from the prior year. We can conclude that FEMA assistance and Insurance proceeds were adequate to keep most businesses from filing or, in the case of small businesses that were completely destroyed, the owners simply walked away without a costly bankruptcy filing.
“The only business of any size that attributed its Chapter 11 filing to the effects of the storm was Big M Inc, the operator of Mandee Shops, Afaze and Annie Sez. Court documents showed that the company’s distribution center was flooded, several stores damaged and insurance proceeds did not cover their losses.
“While the initial bankruptcy statistics are in contrast to expectations of a regional bankruptcy filing increase following a natural disaster, we will have to wait for the release of subsequent statistics before drawing conclusions on the storm’s long impact upon businesses in those areas,” said Bob Carbonell.
Credit2B provides world-class on-demand business credit intelligence, including reports, predictive scoring, and a peer-to-peer exchange of trade experiences on common customers. Built as a cloud-based application, Credit2B today delivers remarkably, high quality and timely information which is validated by a network of trusted connections. Credit2B is simple to join, create connections on shared customers, and access huge amounts of information from peers and third party credit bureaus through a high-fidelity experience.
Smyyth provides world class Credit-to-Cash and accounts receivable services that the world’s largest companies use to manage risk and optimize cash flow and profits using best practices for credit, accounts receivable, collections and deduction management. The Smyyth technology platform streamlines operations, slashes costs, and increases profits. Smyyth technology and services are built on Six Sigma principles and are SAS 70 Certified. Please visit www.smyyth.com for more information about Smyyth products and services.