Bankruptcies Rising Amid Continued Uncertainty—What You Can Do

We remain in uncertain times. While there is a growing sense of optimism fueled by promising signs on vaccines, treatments, and a new stimulus package, bolstered by the return of sports, many areas of the country are still badly affected by the pandemic. 

There is reason to be hopeful, but none of these positive developments are guaranteed to come to fruition. And even if the virus were to disappear tomorrow, the long-term effects on our society and economy would still be felt. 

The expected rise in bankruptcy filings has begun. Many large corporations have already filed for Chapter 11 protection, and every indication suggests more are on the way. For example, ominous signs are coming from Tailored Brands, the holding company for Men’s Wearhouse and Jos. A. Bank, as they have recently missed bond payments and announced layoffs and store closures. In addition, bankruptcy filings overall are on the rise, with a 26% year-to-date increase and a 43% jump in the month of June. 

But a bankruptcy filing does not necessarily spell a company’s demise. When corporations, including some of the largest and most well-known in the country, are missing payments, negotiating with creditors, and resorting to Chapter 11, they are using tools and strategies to survive amid unprecedented difficulties. These same tools and strategies are also available to small and medium-sized businesses, and they should not hesitate to use them. 

So in spite of the positive news, companies should not depend on a quick vaccine, herd immunity, or additional trillions from the federal government. Be proactive and learn about the options and resources available to you. Maintain frequent communication with your lenders, who want you to succeed just like you do. And reach out to restructuring professionals who can help you develop a strategy for the turbulent times ahead. Having a proper game plan can give you peace of mind and a sense of having a say in the future of your business, as opposed to being at the mercy of biological, economic, and government forces beyond anyone’s control.

Eric Browndorf  is a Partner and Chairman of the Bankruptcy & Financial Restructuring practice group and Co-Chairman of the Small Business Advice group. Eric may be reached at 609-572-7538 or via e-mail at

Edward Corma is an Associate in the Bankruptcy & Financial Restructuring, Business & Tax practice group. He is admitted to practice in Delaware, New Jersey, and Pennsylvania. He can be reached at 856-857-5550 or via e-mail at

Our e-mails about recent developments are not intended to substitute for our legal advice to our clients based on your specific needs or requests. In addition, our guidance is subject to, and can be superseded by new laws, rules, regulations, or orders. Moreover, some directives from the Federal and State authorities can appear, and can be, contradictory or in conflict, so please contact us for assistance.