One year ago today, 11 PE-backed companies had bitten the dust. In 2008, we kicked off the year with eight PE-backed companies. Not the case in 2010.
This January, only two (two!) companies filed for Chapter 11 bankruptcy protection. Atrium Companies, backed by Kenner & Co. and Golden Gate Capital, and Uno Restaurant Holdings, owned by Centre Partners Management. Is this a sign of things to come? A continuation of the downward trend in portfolio company filings that began last year?
Last year’s bankruptcies topped the prior two years, but 2010 may reveal that ’09 was the peak. It’s too early to call in January of course, but not when you consider that the decrease of LBO-backed bankruptcies began in September of last year. There was a total of one PE-backed Chapter 11 that month. October came back with a handful, and a few more out in November and December, but overall, the year was front-loaded. If 2010 goes the same way, I’ll click my heels in joy. (A smaller list means less work for me!) PE investors, who have a little more to lose than a few hours of research, will rejoice too.
peHUB PE-Backed Bankruptcies Jan 2010