A sign of times to come?

Somos mas pelaoIn a trend most likely linked to the stagnant economy in Puerto Rico, the "Boletín de Quiebras" has reported that the number of bankruptcies in Puerto Rico has sky rocketed. The beginning of 2007 brought a huge number of bankruptcies filed in the federal court. The number of cases filed more than doubled the number cases from the previous year. In comparing the beginning of 2006 with 2007, there has been an increase of 102% in filings. 483 cases were filed in January of this year, compared to 239 filed in January of 2006. These 483 cases represent a debt of $84.9 million dollars to their respective creditors.

Not only has the number of cases doubled, but the amount of money owed is triple the debt that was filed in January of 2006. Further, the number of commercial bankruptcy cases quadrupled. Their were only nine (9) commercial bankruptcy filings in 2006 and that amount surged to 39 cases in January 2007. Of those 39 cases, the five types of business most frequent were clothing stores (12), cafeterias (3), construction contractors (3), convenience stores (colmados) (2), and beauty salons (2).

There were fourteen (14) bankruptcy cases requesting reorganization (Chapter 11), which represents six times the number filed in 2006. There were 113 cases requesting liquidation (Chapter 7) and 356 cases filed for personal reorganization (Chapter 13). Mayagüez and Vega Baja were the municipalities with the largest increases in bankruptcy filings.

The largest commercial bankruptcies were:

  • $19.5 Million - Almacenes Linda, Inc.
  • $11.9 Million - Advanced Cardiology Center, Corp.
  • $ 2.6 Million - Personal Aircraft Services, Inc.
  • $ 1.3 Million - Corus Hardware Corp.
  • $ 0.8 Million - Supermercado Poms
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