“ Mega Bankrupces ” are the highest they have since started since the start of the pandemic, up 33% since last year

The leap of the “Mega Bankrumes” – those deposited by companies with more than a billion dollars in declared assets – was even more brutal, increasing by 33% in the last year only, marking the greatest number of Mega bankruptcies in a period of six months since the start of the pandemic in 2020.

Continuous inflation, high interest rates, the drop in consumer demand, prices and changes in uncertain policy stimulate the increase in bankruptcy, in particular for companies already in difficulty, according to Matt Osborn, director of Cornerstone Research and co-author of the report.

“A number of companies already have low balance sheets from the previous three years in the context of high inflation and interest rates,” Osborn told CFO Dive. “Additional uncertainty about the regulatory landscape is more recently superimposed in addition to these companies which are already weakened by general macroeconomic winds, also cites political uncertainty.”

The manufacturing has recently been affected by the policy changes in Washington, with “the largest share of bankruptcy files in all industries”, with 30% of all documents according to the report. Among the manufacturers who deposit mega bankruptcies, 67% “cited the regulatory, legal and political landscape as a key financial distress engine”.

This report was initially published by CFO BREW.