Pandemic Fallout Is About To Overwhelm The Bankruptcy System—And Hit Small Businesses Hardest
If you think bankruptcies have been a scourge in the pandemic so far, brace yourself—they’re set to rise dramatically. The business busts will strike small firms disproportionately, which is bad news for more than just the business owners. It’s bad for the whole economy, because the surge of financial pain may overwhelm the bankruptcy system. As a result, the process could become chaotic, with viable businesses killed and doomed ones kept artificially alive. A major part of the problem: There are not enough bankruptcy judges. That worrisome outlook emerges from new research by Robin Greenwood of the Harvard Business School, Benjamin Iverson of Brigham Young University’s Marriott School of Business, and David Thesmar of the MIT Sloan School of Management. Read more at Fortune.
Forget $3 Trillion. $30 Trillion isn’t enough.