But then the pace slowed down, companies found ways to avoid the courts and the list finished the year with 74 total bankruptcies. That’s far more than 2008’s total (and blows 2007’s grand total of two out of the water), but it isn’t nearly as high as expected.
We can attribute the slowdown to a little thing called Amend & Extend (or, as Mark Patterson of MatlinPatterson called it, “Amend, Extend and Pretend”). Midway through the year, lenders realized they couldn’t be complete jerks about their loans if they didn’t want a tsunami of bankruptcy cases on their hands, so they relented, allowing sponsors and their companies to “kick the can down the road” (another buzzy phrase of the year) and extend debt maturities.
Whether or not that solution will prove to save all the overlevered companies out there has yet to be seen, but for 2009, it was a saving grace. Download the entire spreadsheet below.
(Our usual disclaimer: the total does not count minority stake bankruptcies but the spreadsheet has a separate listing of those. We do not include bankruptcies of companies backed by hedge funds.)