Corporate defaults on upswing as debt comes due
USA TODAY, May, 2008 by Matt Krantz
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Companies counting on consumers spending like there's no tomorrow are finding tomorrow may not be as bright as they'd hoped.
Corporate defaults, including the owner of the Tropicana casinos this week, are reaching levels not seen in years as companies struggle with a fickle bond market and nervous consumers.
Already this year, 27 U.S. companies have defaulted on their debt, according to Standard & Poor's, exceeding the 16 companies that defaulted in all of 2007. Many of these companies, including Tropicana Entertainment, have already filed for bankruptcy protection.
Bankruptcy experts say the uptick in defaults is just beginning, because massive amounts of debt will come due at a much faster pace in about a year.
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"The flood hasn't come yet, but the leading wave of the flood is in sight," says Martin Zohn, head of the bankruptcy practice at law firm Proskauer Rose.
A rise in ...
