2 posts from June 2021

Book Rec: Range (or Yet Another Paean to Learning from Failure)

posted by Jason Kilborn

With summer upon us, I thought others might be searching for good new reading, as I was when I took up a smart friend's longtime recommendation to read Range: Why Generalists Triumph in a Specialized World. So much good stuff in here. Perhaps contrary to the topic of the book, my brain is constantly in "insolvency policy" mode, so I was particularly interested in the many passages about famous people's meandering struggles to find their passion that catapulted them to success.

Among my favorites was a description of Nike co-founder Phil Knight's entrepreneurship philosophy: [155] "his main goal for his nascent shoe company was to fail fast enough that he could apply what he was learning to his next venture. He made one short-term pivot after another, applying the lessons as he went." This is exactly the advice offered to country after country hoping to develop more effective SME-friendly bankruptcy regimes ... as they unfortunately continue to stick to Old English draconian policies of imposing various restrictions and disabilities on post-bankruptcy entrepreneurs. Range offers yet another extended analysis of why this mindset is so persistent and so counterproductive. We need to let people fail, learn from whatever caused that failure (either mistakes or general economic volatility ... or COVID) and get back on their feet quickly to move on to other ventures.

Continue reading "Book Rec: Range (or Yet Another Paean to Learning from Failure)" »

Bankruptcy Filing Rates Not Rising, May Go Lower

posted by Bob Lawless

UntitledThe latest data from Epiq Systems shows that year-over-year bankruptcy filings dropped again in May after an increase in April. The April and May figures are particularly important because they give us two months of year-over-year comparisons with post-Covid data.

In April, there was an average of 1,860 filings per day which was an increase of 6.4% from the previous April. That uptick made me wonder whether we were beginning to see the long-predicted increase in bankruptcy filings because of the pandemic. That speculation proved premature because the May figure was 1,738 filings per day, which was not only a decrease from April but a year-over-year decline of 13.1%.

Whether the April increase or the May decrease ends up being the one-month blip is something we will learn over the next few months. It is that kind of insight you are looking for when you come to this blog--the future will reveal the future. It is much easier, however, to come up with a story that April was the anomaly than vice versa.

Bankruptcy filings are seasonal, spiking in the early spring. Ronald Mann and Katie Porter persuasively documented the reason for that is tax refunds going to pay the cost of the bankruptcy filing. Usually the effect runs from February to April with a peak in March. This year, the IRS tax filing statistics show that refunds ended up being higher overall than last year but started more slowly. There was also a third round of stimulus payments in March that capped out at lower-income levels and at levels that are more typical for bankruptcy filers. For these reasons, what we saw in April might have just been the usual annual seasonality in the filing rate, just pushed back a bit by later-filing tax filers and the stimulus money.

Continue reading "Bankruptcy Filing Rates Not Rising, May Go Lower" »

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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