The Year in Bankruptcy: 2022

This article discusses various bankruptcy developments that occurred over the last year. One year ago, we wrote that, in early 2021, it was widely anticipated that the unprecedented pressure the COVID-19 pandemic brought to bear on the U.S. economy would lead to a boom in corporate bankruptcy filings. That boom never materialized. Instead, business bankruptcy filings in the U.S. plummeted in 2021. That trend continued until the last quarter of 2022. At that time, the volume of business bankruptcies began to swell due to a maelstrom of factors, including the persistence of the pandemic (especially in China, where vaccination rates are low and the population has little resistance due to strict lockdown protocols); the highest inflation in 40 years; spiking interest rates that put an end to the most recent era of cheap financing and lenders' willingness to forbear or extend loan maturities; supply-chain disruptions; and high energy costs caused in part by the war in Ukraine. Predictions ...