David Dragich Quoted in Crain’s Business Detroit Article on Anticipated Surge in Chapter 11 Bankruptcy Filings
For a recent article published by Crain’s Detroit Business, David Dragich was asked to share his perspective regarding the corporate bankruptcy and turnaround market in metro Detroit. Despite the economic downturn due to the COVID-19 crisis, there have been few corporate bankruptcy filings over the past several months.
The low number of filings is due to several factors, including the availability of government stimulus and accommodations made by banks and landlords for distressed companies. However, Dave and other experts cited in the article expect the number of bankruptcy filings to ramp up considerably.
However, while cases will almost certainly increase from current levels, in the article Dave shares why Chapter 11 is not always a viable tool for a troubled company: “One of the underlying premises for a Chapter 11 bankruptcy is that the business is viable on a go-forward basis; it's a reorganization tool to restructure contracts and debt. Unless there is and until there is a viable business, companies are not going to just file a bankruptcy for the sake of it. They need a plan in place and right now they don't have one."
Click here to read the full article on Crain’s Detroit Business.