Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, January 12, 1994 TAG: 9401120030
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
Last year filings the U.S. Bankruptcy Court for the Western District of Virginia in Roanoke fell 14 percent compared to 1992, according to the annual report released Tuesday by John W.L. Craig II, the court's clerk.
Even so, last year was still the third-largest year in the history of the district for total filings, surpassed only by 1991 and 1992.
The 1991 peak reached almost 6,800 cases, Craig said. The number fell to 6,418 in 1992 and to 5,511 last year.
Although total filings have fallen for two consecutive years, Craig said, the number of businesses filing for protection from creditors has continued to rise.
Of 1993's total filings 635 were by operators of businesses, compared to 318 during the prior year.
Craig said business filings jumped 18.5 percent in the Roanoke division, 14.5 percent in the Harrisonburg division and 10 percent in the Lynchburg division.
As usual, the majority of filings in the district are under Chapter 7 of the federal bankruptcy law, from petitioners seeking liquidation.
Of the 1993 cases, 4,598 were for liquidation, 64 were for business reorganizations, 841 were for wage-earner plans and eight were for operators of family farms.
Craig said the Western District followed the national trend, with fewer total bankruptcy filings in 1993 than in 1992.
"I'm completely baffled," Craig said of the district and national trends.
He is, however, bracing for a surge in filings that generally comes early each year following an upward trend in Christmas season retailing.
Some people say a low number of filings indicates a good economy, he noted, but others say the number should rise in a good economy - as it did in the 1980s - because more people take greater financial risks.
Each of the court's division in the district saw a decrease in filings in the past year.
The smallest was in the Roanoke division, 11 percent; the largest was in Harrisonburg.
Craig said this corresponds inversely to the rate of increase over the previous several years, with Harrisonburg growing fastest and the Roanoke division growing the slowest.
The Roanoke division encompasses all of Virginia west of Bedford.
The Harrisonburg division encompasses the upper Shenandoah Valley from Staunton north. The Lynchburg division is primarily the corridor that runs from Danville through Charlottesville.
The Lynchburg division continues to have the largest number of wage-earner plans, with 436 last year compared to 365 in the Roanoke division and 40 in Harrisonburg.
Business reorganizations were most numerous in the Roanoke division, with 27 filings as opposed to 21 in Lynchburg and 16 in Harrisonburg.
Family farm bankruptcies remained rare in this district, with six in the Roanoke division, two in Lynchburg and none in Harrisonburg.
Craig said the number of liquidation petitions in the district has diminished slightly for the fourth consecutive year. Wage-earner plans have increased 4 percent over that time, while business reorganizations and farm bankruptcies have remained fairly constant.
by CNB