Q2 League Tables: Recession Spikes Energy, Retail, Restaurant Bankruptcies
The economic recession brought on by the Covid-19 pandemic has resulted in an accelerated rate of Chapter 11 filings in the energy, retail and restaurant sectors in the second quarter.
The novel coronavirus outbreak led to a shutdown of most business activity in the oil and gas, retail and restaurant industries in the first two months of quarter.
Not long after businesses began opening up again at the end of May, another spike in Covid-19 cases and hospitalizations in certain parts of the country beginning in mid-June has threatened to shut it all down again as the July 4th holiday approaches.
The wave of bankruptcy filings hit most sectors throughout the second quarter, and the negative effects from the unrelenting Covid-19 virus threaten to further extend the economic downturn and send more businesses to court to file Chapter 11 in upcoming months.
The energy sector had the highest amount of Chapter 11 filings in June with no fewer than seven notable companies filing petitions. Sable Permian Resources LLC and Templar Energy LLC filed petitions seeking to sell their assets, while Martin Midstream Partners LP and Chisholm Oil and Gas Operating LLC proposed swaps of their debt. Vista Proppants and Logistics LLC, Extraction Oil & Gas Inc. and Hi-Crush Inc. each looked to restructure their debt.
In May, Gavilan Resources LLC and Freedom Oil & Gas Inc. filed petitions to sell their assets, and Ultra Petroleum Corp. filed for a prepackaged Chapter 11 reorganization.
April was an even busier month for the energy sector with Diamondback Industries Inc. and Yuma Energy Inc. filing petitions to sell their assets. Diamond Offshore Drilling Inc., Hornbeck Offshore Services Inc., Sklar Exploration Co. LLC, Whiting Petroleum Corp. and coal power pant operator Longview Power LLC filed Chapter 11 to restructure. Oilfield services company Eco-Stim Inc. filed a petition to liquidate.
Bankruptcy filings in the retail sector slowed down a bit in June with GNC Holdings Inc. submitting the most significant petition to restructure. However, retailers were busy lining up to file Chapter 11 in May with department stores Neiman Marcus Group Ltd. LLC and J.C. Penney Co., bath and body retailer Sabon Holdings LLC, home décor chain Tuesday Morning Corp. and lifestyle brand company Centric Brands Inc. all filing petitions to restructure.
Department store chain Stage Stores Inc. and men’s wear retailer John Varvatos Enterprises Inc. also in May sought to sell in Chapter 11. J. Crew Group Inc. filed its petition to propose a debt-for-equity swap, and Pier 1 Imports Inc. planned to liquidate and wind down in Chapter 11.
In April, True Religion Apparel Inc. filed its petition to restructure.
Restaurants heading to bankruptcy court in June included Chuck E. Cheese restaurant parent CEC Entertainment Inc., seeking to restructure, and casual dining chain Barfly Ventures LLC, which planned to sell its assets.
Specialized restaurant chains also entered Chapter 11 in May, including sushi chain Sustainable Restaurant Holdings Inc. and PQ New York Inc.’s bakery restaurant chain Le Pain Quotidien.
Italian restaurant chain operator FoodFirst Global Restaurant Inc. filed Chapter 11 to sell its assets in April. Joining the company in bankruptcy was deli restaurant chain TooJay’s Management LLC.
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