Financial institutions are beginning to pick up signs of distress in some of their borrowers and bracing for an increase in bankruptcy filings, McGuireWoods Pittsburgh partner Mark Freedlander told Law360 in a Sept. 21, 2022, story. Freedlander chairs the firm’s Restructuring & Insolvency Department.
Law360 reported that while new and active bankruptcy filings remain low for now, many lenders spot trouble lurking around the corner as interest rates begin to rise and the economy continues its uneven recovery from the pandemic.
Freedlander said many industries across the manufacturing space are stretched for liquidity after they spent large amounts of money to bulk up their inventory amid far-reaching supply-chain disruptions caused by the pandemic — and now they’re struggling to unload it due to softening demand.
“Our expectation is that there will be an increase in the financial distress within the market that will likely lead to an increase in bankruptcy filings,” Freedlander told Law360. “I couldn’t tell you if that’s going to happen in three, six or nine months, but within a relatively finite period of time, everything we see, everyone we talk to, every analysis we do lead us to believe there will be an uptick … not a big wave, but a moderate increase in those filings.”
Law360 also noted in its story that McGuireWoods welcomed veteran restructuring lawyer Trey Rayburn as a partner in Charlotte in June, after adding Demetra Liggins as a partner in the firm’s Restructuring & Insolvency Department in Houston last year.