WASHINGTON (AFP) — The financial crisis sparked a surge in bankruptcies in 2008 as the value of assets of publicly traded bankrupt US firms spiked to a record 1.16 trillion dollars, a research firm said Tuesday.
BankruptcyData.com said the number of publicly traded companies filing for creditor protection in 2008 was 136, a sharp increase from the 2007 figure of 78 but short of the 2001 record total of 263.
However, the assets of the companies filing for bankruptcy in 2008 increased dramatically to 1.16 trillion dollars from 70.5 billion in 2007, the firm said.
Much of that came from the collapse of Wall Street investment giant Lehman Brothers, the biggest bankruptcy filing in US history with assets of 691 billion dollars.
"The assets going into bankruptcy in 2008 were extraordinarily high because of the unusual number of filings by large financial institutions," said George Putnam, of BankruptcyData's parent New Generation Research.
"Financial companies often have much greater asset totals on their balance sheets compared to companies in other industries."
He noted that Lehman's assets were more than six times greater than the previous record holder, WorldCom.
The report noted that three of 2008's bankruptcy filings -- Lehman Brothers, Washington Mutual and IndyMac Bancorp -- made it into the 10 largest bankruptcies of all time.
A total of 12 publicly traded financial firms filed for bankruptcy in 2008, accounting for just over one trillion dollars in assets.
Excluding financial companies, there were 124 filings in 2008 with 65 billion dollars in assets.
Putnam said the wave of bankruptcy filings may not have peaked yet.
"Despite the healthy jump in bankruptcy filings in 2008, I believe that the current bankruptcy wave is still in its early stages," he said.
"Corporations issued record amounts of debt between 2003 and 2007, and to date they have only defaulted on a very small percentage of that debt. I would expect default rates to climb considerably higher before this bankruptcy cycle reaches its peak, probably in late 2009 or 2010."
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