Bob Keach, Lindsay Milne Quoted in Law360’s Top Bankruptcy Trends of 2024

This week Law360 published a midyear report on the top bankruptcy trends of 2024, highlighting key industry developments as Chapter 11 filings continue to rise. Shareholders in Bernstein Shur’s Business Restructuring and Insolvency group Bob Keach (co-chair) and Lindsay Milne were quoted in the article, offering their perspectives on the current bankruptcy landscape, including sector trends and how legislative efforts continue to shape the industry.

Lindsay Milne on the Struggles of Over-Leveraged Companies

Lindsay Milne provided insights on the growing number of Chapter 11 filings, particularly among startups and small businesses. She noted that companies with operating costs exceeding cash flow could survive in a low-interest rate environment but are now struggling as borrowing costs rise. “They’ve depleted that cash at this point and are having to face the reality of an operating model that doesn’t work,” Milne stated.

Milne also commented on sector-specific challenges, particularly in healthcare, where slow reimbursement rates from Medicare and Medicaid create cash flow issues. She observed that while some sectors like retail have seen a decline in bankruptcies, commercial real estate and renewable energy continue to face stress. “There’s a flood of investment in the marketplace [in renewable energy], and inevitably some of those businesses will fail,” Milne said.

Bob Keach on Legislative Pressure and Bankruptcy Reform

Bob Keach offered his perspective on the legislative landscape, noting the uphill battle for various bankruptcy-related bills in Congress. He pointed out that proposals for venue reform and measures targeting bad-faith filings face significant political obstacles. “Politically, I just don’t see it passing,” Keach commented on the prospects for venue reform legislation.

Keach also discussed the potential reinstatement of the higher debt limit for Subchapter V bankruptcies, which would be a welcome change for small businesses seeking a streamlined restructuring process. “I’m cautiously optimistic that the Sub. V debt limit will go back up to $7.5 million reasonably promptly,” he noted, while acknowledging the time constraints posed by the upcoming election season.

Looking Ahead

As the bankruptcy landscape continues to evolve, the insights from our shareholders highlight the challenges and opportunities ahead for businesses navigating financial distress. For more information, or to discuss how these trends may impact your business, please contact Bob at rkeach@bernsteinshur.com or Lindsay at lmilne@bernsteinshur.com.

To read the original Law360 article, “Top Bankruptcy Trends Of 2024: Midyear Report” by Ben Zigterman, click here.