Thursday, July 16, 2009

 Business leaders, turnaround professionals and bankruptcy lawyers are bracing for an approaching wave of business reorganizations.

While data released today shows a drop in new claims for unemployment, it is too early to say that ?the worst is behind us.? Some industries are doing better than others, and within each industry, some businesses are faring much better than others. However, many businesses are facing unprecedented challenges to cash flow.

D&B Deutschland (the German subsidiary of Dun and Bradstreet) is predicting that business bankruptcies in the United States and Europe may increase by as much as 60% in the second half of 2009.

While he hopes that projection is overly pessimistic, business reorganization attorney Myles Alderman confirmed that what his firm is seeing in Connecticut and in the Southern District of New York is consistent with an increase in business bankruptcies. In his opinion ?The increase in the number of businesses attempting to modify contracts, credit facilities and franchise agreements, as well as an increase in the volume of litigation related to non-payment for commercial contracts leads me to believe that we are going to see a significant increase in the number of business bankruptcies over the coming 12 months"

Some business will be able to ride out this economic cycle, without too much trouble. Other businesses may be unable to survive regardless of what action management takes. However, for many businesses modification of contracts and advantageous credit facilities are essential to success. Myles Alderman added ?Non-judicial workouts can provide a cost-effective means for business restructurings, but in some cases, Chapter 11 reorganization offers the greatest probability for a successful business reorganization"

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Myles H. Alderman, Jr., has been guiding business leaders through financial crises since 1986. He is the author of Chapter 11 Business Reorganizations: For Business Leaders, Accountants and Lawyers (Outskirts Press, 2006), the Bankruptcy Law Chapter of the Connecticut Lawyers Desktop (CBA, 2008) and dozens of articles. He has been heard on radio shows across North America and his commentary has been printed in numerous magazines and newspapers, including the New York Times.

He is an active member of the Business Bankruptcy Section of the American Bar Association, The Business Bankruptcy Section and the Fraud Taskforce of the American Bankruptcy Institute, and The Executive Committee of the Commercial Law and Bankruptcy Section of the Connecticut Bar Association. He was educated at Kenyon College (A.B. Economics & Psychology), Cambridge University (Post-Grad. Economics), and Syracuse University College of Law (J.D. Cum Laude), where he earned the LFE Goldie Award for Outstanding Scholarship and was managing editor of the Syracuse Journal of International Law and Commerce.