DENVER—Business bankruptcies in Colorado jumped 40 percent through September from the same period last year and could exceed 800 by year’s end.
Activity at the U.S. Bankruptcy in Colorado has been steady, but dramatic, said Brad Bolton, clerk of the court. The total number of business cases was 660 through the first nine months of this year.
Still, Bolton said, business bankruptcy filings totaled 96 in September, the highest monthly figure since the record was set in October 2005.
The turmoil on Wall Street and the credit crunch will drive some Colorado businesses into bankruptcy, but those cases may not show up until early next year, said Greg Barrow, managing director of General Capital Partners in Denver.
“The next wave might be attributed to the meltdown. There is not any lending happening. Companies aren’t able to renew existing lines of credit or find replacement lines of credit,” said Barrow whose firm works for struggling companies with assets between $10 million and $50 million find new financing or investment.
Many of the bankruptcies involve real estate businesses or companies such as retailers, hotels and restaurants hurt by slower consumer spending, Barrow said.
Professional Trade Supply of Colorado, started in the early 1970s, opted for Chapter 11 bankruptcy protection after its credit lines and vendors were reduced amid the economic upheaval. The company, which buys tile and other flooring material from manufacturers and sells it to dealers, had faced declining demand as residential construction slumped and the commercial sector weakened, company president Peter Rincione said.
Rincione said he opted for bankruptcy protection because he believes he has a sustainable business, but he’s “not positive we’re going to have a stable economy going forward.”
Colorado’s bankruptcy filings soared in late 2005 before a new law took effect that made it harder for people to erase debts. The number dropped sharply in 2006 before rising again.
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Information from: Rocky Mountain News,
