If it seems that this economic cycle has more bankruptcies resulting in liquidation than in the past, that's because it's true. Changes in bankruptcy law, combined with extra-tight credit, have made it tougher for companies to recover from Chapter 11.Private-equity firms, once flush with cash and eager to buy retailers for their real estate, aren't in the hunt.
And big chains that had been obvious buyers in the past, such as Nordstrom, Target, J.C. Penney, and Kohl's, are cutting back expansion plans.
"There is less of a population of people to sell these things to and it is creating more difficulty for those retailers to get out of those leases ... "Retailers have less time for reorganization under the new bankruptcy laws, which might once have allowed a company to stall a bit until things improved enough that bad leases could be shed and credit arranged.
Overall, as the graphic shows, the number of bankruptcies is not unusually high -- this year and next will probably roughly equal the last downturn in 2000-01, but fewer of those companies going into Chapter 11 are likely to come out.
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