Record Bankruptcies Predicted in Next Year as Unemployment Soars

Bankruptcies related to Covid-19 shutdowns will set records in the next 12 months, according to Edward Altman, the professor emeritus at New York University’s Stern School of Business who developed a widely used method called the Z-score for predicting business failures.

“Whether it’s corporate bankruptcies or personal, this is unprecedented,” Altman said in an interview. “We will break the record in dollar amounts because there are much greater amounts of debt outstanding now than in any prior downturn.”

At this point, he isn’t predicting record-breaking bankruptcy rates in the next year despite the surge in unemployment. Almost 17 million ...