Turning to Bankruptcy Again – and Again

Posted on March 7, 2012 at 1:14pm by

NEW YORK (Reuters) – Bankruptcy can be just about as traumatic as it gets for a company, its employees, customers, and suppliers. The only thing worse – going through it again, and again.

The number of companies making second trips through bankruptcy — sometimes dubbed “Chapter 22” filings, or Chapter 11 times two — has jumped in the first two months of 2012.

Four of the 17 public companies that have filed for bankruptcy this year, including Twinkie maker Hostess Brands and family-style restaurateur Buffets, are repeat filers, according to BankruptcyData.com, which tracks filings by publicly traded companies and repeat filings for companies that were once listed on a stock exchange. That compares with six companies that slid back into bankruptcy in all of 2011.

It’s not unheard of for a company to file a “Chapter 33.” Late last year, clothing retailer Filene’s Basement filed its third Chapter 11 in 12 years. It has now gone out of business.