2020 Bankruptcy Filings in Pittsburgh at Lowest in 17 Years Despite COVID-19 Global Pandemic

In October of 2020, the Duquesne Business Law Informant published an article regarding how the coronavirus pandemic had caused 739 businesses to close their doors permanently.  Four months later, although the COVID-19 pandemic is still ongoing, the Pittsburgh Business Times reported that bankruptcy filings in 2020 were the lowest in Pittsburgh that they had been in at least 17 years.

This past August, the news site reported that Pittsburgh area businesses had the lowest number of bankruptcy filings going into the second quarter of the year that the US Bankruptcy Court for the Wester District of Pennsylvania had seen in the past 15 years.  At the time, there were concerns that the low numbers would not last, that the numbers were going to increase in the second half of the year. 

Earlier that year, the Pittsburgh Business Times predicted that the number of bankruptcies in 2020 would increase, following a trend of increased commercial filings in 2019.  However, there were only 212 commercial bankruptcy filings during the fiscal year of 2020.  This number is a marked decrease from the 267 filings, and even fewer than the 232 of 2014. 

The American Bankruptcy Institute, the nation’s largest association of bankruptcy professionals, provided the news media site with data pertaining to the breakdown of the number of each type of bankruptcy filings filed in the past year.

In 2020, Pittsburgh had 137 Chapter 7 filings, or liquidations.  48 Chapter 11 bankruptcy filings, or restructurings, occurred.  There were 25 Chapter 13 filings, referred to by the Times as “a wage earner’s plan for sole practitioners.” 

These low numbers come as a shock to many, as the summer and early fall of 2020 marked many big-name companies filing for bankruptcy, including J. Crew, J.C. Penny, and Brooks Brothers.  However, the Paycheck Protection Program (“PPP”), managed by the U.S. Small Business Administration, was able help many small businesses that were struggling due to the coronavirus pandemic during 2020.  Last month, as the second round of PPP was authorized, providing $284 billion of federal funding in loans to small businesses that are continuing to struggle.

It is unclear what effect this second round of funding will have on small businesses in the Pittsburgh area.  But as the coronavirus pandemic continues and Pennsylvania struggles to get second doses of the Moderna virus to its citizens, it is uncertain how long these decreased bankruptcy filings will last. 

Be the first to comment

Leave a Reply

Your email address will not be published.