ANALYSIS: Shutdown Brings Calm Before the Bankruptcy Storm

In the three-month period from February to April, Bloomberg Economics’ Recession Tracker reported that the chance of the U.S. economy entering a recession shot up from 28% to 53% to 100%. I generally operate from the perspective that nothing is guaranteed. Nothing is 100%. Yet, here we are. Non-essential businesses are closed. Yet the U.S. Bankruptcy Courts are essential and remain open for business, and bankruptcy analysts, attorneys, and even judges are predicting a sharp increase in filings.

For first quarter 2020, business bankruptcies increased while overall filings went down slightly, but that decrease is only temporary. It is ...