Delaware Chapter 11 bankruptcy court filings drop 68% to 524 in 2021. Delaware Chapter 11 ‘mega-cases’ plummet
from 98 to 33. | DBT PHOTO BY MIKE ROCHELEAU
WILMINGTON — Delaware has long been a national leader in bankruptcy filings, with its federal court seen as a magnet for the most complex cases involving the most assets.
At the height of the pandemic in 2020, the U.S. Bankruptcy Court for the District of Delaware recorded 1,666 Chapter 11 filings, more than double the 2019 total and reaching levels not seen since the Great Recession. These filings included a near record 57 filings with assets of at least $100 million.
Many in the financial and legal industries expected those numbers to hold up in 2021 as the effects of the pandemic reduced the company’s revenue and profits.
Conversely, government intervention through the Paycheck Protection Program, stimulus checks and other programs, along with low interest rates, have helped sustain many businesses and prevent them from going bankrupt, which led to a dramatic slowdown in filings across the country and in Wilmington.
Chapter 11 filings here fell 68% to 524 in 2021, and the state’s share of Chapter 11 “mega cases” fell from 98 to 33. Despite these declines, Delaware continued to be the first step for many large companies seeking to reorganize their debts or liquidate assets, ranking #1 in total Chapter 11 filings.
Much like the nearby Delaware Court of Chancery’s reputation for corporate law, bankruptcy plaintiffs prefer to file in Delaware because of familiarity with its eight-member judicial panel that adjudicates cases. . Wilmington Court’s weighted caseload per judge was 2,363 last year, by far the largest of any court in the nation. Led by Judge Laurie Silber Silverstein, the court is currently one member short as the Third Circuit seeks to replace recently retired Chief Justice Christopher Sontchi.
The continued strength of the Delaware bar and bankruptcy courts has led to more law firms opening offices in Wilmington, including more recently in New Jersey. Pashman Stein Walder Hayden.
John Weiss, president of its bankruptcy, restructuring and creditors’ rights practice, recently told the Delaware Business Times that the company opened an office here a year ahead of schedule to capitalize on continued large filings. value.
