Many companies in San Diego and throughout California are filing for bankruptcy due to the Coronavirus pandemic. The coronavirus has also resulted in nearly 30 million Americans losing their jobs. The decline in disposable income and a massive decline in consumer confidence has caused many businesses to shut down or file for bankruptcy. Experts have seen an increase in bankruptcy filings and they anticipate more to come as shutdowns continue in many U.S. states.
The Hardest Hit Industries Will Experience Bankruptcy Filings
Nearly every San Diego company and industry has suffered as a result of Coronavirus. Forest products, retail stores, consumer products, and transportation industries will suffer the greatest financial hit, however. In the retail industry, economists have run stress tests that suggest that without intervention or material action, the following companies will likely be the most at risk:
- Children’s Place
- Best Buy
Travel Companies Have Suffered Exponentially Due to Coronavirus
The airline industry and transportation industries have also suffered financially during the pandemic. As of right now, many states have still enacted stay-at-home orders that ban traveling. Even after states and countries lift their travel bans, many consumers will not be confident enough to travel, especially as experts have predicted that a second wave of coronavirus will happen in the fall.
AMC Theaters in San Diego May File for Bankruptcy
San Diego is home to 9 AMC theaters that remain closed after San Diego County issued the closure of all non-essential businesses to stop coronavirus from spreading. AMC theaters could file for bankruptcy protection if they do not receive enough federal help, and depending on how long San Diego remains under a shutdown order. The following other companies might also file for bankruptcy in San Diego:
- Neiman Marcus
- 24 Hour Fitness
- Rite Aid
- Neiman Marcus
- Gap Inc.
- All department stores, especially those who do not have an active online retail presence
Most Large Companies Will File for Chapter 11 Bankruptcy
Those companies that file for Chapter 11 bankruptcies in San Diego will be able to reorganize to reduce their debts. Smaller San Diego companies might need to file for Chapter 7 bankruptcy. After Chapter 7 bankruptcy, the company will liquidate its assets to pay off its creditors. A bankruptcy trustee will sell off their unsecured debt.
American consumers drive 70% of the economy. When stores close abruptly, the shutdowns deeply affect the country’s economic health. Hundreds of thousands of retail workers have suffered furloughs.
If You are Facing a Bankruptcy in San Diego, Our Lawyers Can Help
If your San Diego business is facing bankruptcy due to the coronavirus shut down, you need an experienced legal team on your side. The Bankruptcy Law Center is a San Diego Bankruptcy Law firm with the experience needed to help our clients restore their financial independence. Contact our law firm today to schedule your initial consultation.