Commercial Bankruptcy Declines Tied to Economy

A bankruptcy attorney is arguing that business bankruptcies have dropped to record low levels due to the huge amounts of cash that investors are putting into companies, not because of the ramifications of the 2005 bankruptcy reform law.

Richard Herzog Jr., an attorney with Nelson Mullins Riley & Scarbourough LLP, says that businesses’ current access to cash has more to do the nearly 50 percent decline in commercial bankruptcy filings that occurred from 2005 to 2006. Last year there were 19,696 commercial bankruptcy filings compared with 39,201 filings in 2005, according to the American Bankruptcy Institute.