The number of businesses filing for bankruptcy declined about 7% in April over the peak level reached in the previous month, but the total remains well above historical norms.
There were 7,711 commercial filings last month, still an elevated number but down from March's 8,283 - the greatest number of business bankruptcies recorded since filings began to surge in the middle of 2008, according to data released Monday from Automated Access to Court Electronic Records.
Commercial bankruptcies also declined on a year-over- year basis, falling 6% last month compared to April 2009.
Jack Williams, a bankruptcy law professor at Georgia State University, cautioned that the decline last month could be a temporary calm in what he expects to be a busy year in bankruptcy court for many companies.
"We are in the eye of the financial distress hurricane," he said.
The number of companies seeking shelter from their creditors this year continues to outpace 2009's eye-popping figures. Through the first four months of this year, 29,256 businesses filed for bankruptcy, compared to 28,694 for the same period last year.
"We may be seeing some stabilization," Williams said. "But stabilizing against the red line is much different than stabi- lizing at historic averages."
Williams said the number of filings may actually pick up as the economy improves. At this point, banks are hesitant to push a company into a liquidation or bankruptcy when their collateral has little value.
As the economy strengthens, he said, investors and regula- tors will put pressure on banks to clean up their balance sheets, which will mean forcing nonperforming borrowers to restructure or liquidate.
While business filings slipped in April, the number of indi- viduals seeking bankruptcy protection increased, according to separate figures released Monday by the American Bankruptcy Institute.
The trade group said consumer bankruptcies filed in April increased 15% nationwide over April 2009. More than 144,000 Americans filed for bankruptcy protection last month.
