Federal bankruptcy filings are up 322 percent citywide compared to the same period last year, according to a report in Crain’s New York, not the most promising of trends amid this year’s economic turmoil.
There were 335 bankruptcy filings in New York City, in comparison to 104 in the same period last year.
Experts quoted in the article attributed the sharp spike to — surprise, surprise — the wretched economy, in particular, to the lack of credit that would normally be used to help buoy a business in rough times:
“In the past, when sectors were going through distress or economic conditions were declining, businesses could always look to the credit markets,” observes Dalton Edgecomb, managing director of Huron Consulting Group, which advises distressed companies. “Now, a lot of these companies don’t have the ability to go out and seek additional funds to get them through the cycle.”
Jose Luis Sampedro’s Barrera Construction & Development Corp. is one of the 335 businesses filing for bankruptcy this year. His 15-year-old firm has been hobbled by non-payments from two subcontractors and skyrocketing costs.
"I’m still trying to survive,” Mr. Sampedro said. “I have to struggle for this company.”