Business Bankruptcy Filings Rise 49% in U.S. Amid Deepening Economic Slump

from Bloomberg:



U.S. April Business Bankruptcy Filings Increase 49% (Update1)

By Bill Rochelle and Bob Willis

May 6 (Bloomberg) -- U.S. business bankruptcy filings in April increased 49 percent from a year earlier, the biggest gain so far this year, as the slowing economy prompted more companies to shut down.

Business filings rose to 5,173 during the month, according to statistics compiled from court records by Jupiter eSources LLC in Oklahoma City. Total bankruptcy filings, including those by individuals, were up 31 percent from a year earlier to 93,096, the group said.

Signs of distress, such as bankruptcies and foreclosures, are rising as economic growth has slowed to its weakest pace since the last recession in 2001. The economy lost jobs in April for the fourth month in a row, for a total of 260,000 jobs cuts so far this year.

The latest casualty is Tropicana Entertainment LLC, the owner of 11 casinos that filed for bankruptcy reorganization last night. Tropicana blamed its filing in part on a $2.1 billion cash acquisition of five casinos two years ago which company President Scott Butera said represented, in retrospect, the ``height of the real estate market.''

``When you go into a downturn, the cyclical industries tend to get hit,'' said Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. ``Any sudden downshift in growth will generate rises in these numbers.''

Housing Recession

As the U.S. faces its worst housing recession in a quarter century, almost 650,000 properties were in some stage of foreclosure during the final quarter of 2007, up 112 percent from a year earlier, Irvine, California-based RealtyTrac, which monitors foreclosures, said last week.

Foreclosures and bankruptcies alike are rising as falling home prices make it harder for those in the U.S. to refinance before adjustable-rate mortgages reset. Median prices for existing homes fell in 22 metropolitan areas in February, down 7.7 percent from a year earlier, the National Association of Realtors said April 22. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aN7scHpAb6no&refer=home

...free market forces to cope and wants the Federal Government to bail out real estate speculators and second home buyers :wtf: The man is a complete idiot!