At least 200 U.S. public companies will file for bankruptcy in 2002, according to a forecast by PricewaterhouseCoopers’.

In 2001, 257 public companies filed for bankruptcy. Total bankruptcy filings for 2001 and 2002 will be more than twice the number of filings as the last recession, according to PwC’s Phoenix Forecast: Bankruptcies and Restructurings 2002. There were 125 Chapter 11 filings by public companies in 1991, and 91 public-company filings in 1992.

“This period of restructuring differs vastly from the last recession, in terms of both the record number of bankruptcy filings and the factors driving companies to restructure. The four-fold increase in corporate debt in the last decade, along with the surge in new issues in the 1997 to 1999 period has led to an unprecedented amount of over-leveraged companies,” says Carter Pate, managing partner Financial Advisory Services, PwC, and
author of the report.

Between 1986 and 2000, an average of 113 public companies filed for bankruptcy protection each year. The record number of bankruptcies in 2001 and forecast for 2002 represent a 127% and 77% increase over this average, respectively.

Private company bankruptcy filings are also expected to show record increases in 2002. In 2002, 10,800 private companies will file for bankruptcy, the highest since 1995. In 2001, 9,928 private companies filed for Chapter 11 protection. Industries with increased bankruptcies in 2002 include telecommunications, auto, steel, computer hardware industries, chemical, and retail.