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US bankruptcy pace slows over past 2 weeks, but companies still struggling

U.S. corporate bankruptcies continued to grow in the last two weeks during the coronavirus era but at a slower pace than earlier this year, an S&P Global Market Intelligence analysis shows.

Eighteen companies added their names to the growing list of new filings between Nov. 2 and Nov. 15. This is well below the number of filings in comparable periods since August when Market Intelligence began tracking the bankruptcies. In the previous two-week periods, bankruptcies numbered as high as 31 and 29.

The number of bankruptcies this year is still on track to surpass the figure from 2019. In total, there have been 574 bankruptcies in 2020 as of Nov. 15, compared to 579 filings in all of 2019.

Market Intelligence's analysis is limited to public companies or private companies with public debt where either assets or liabilities at the time of the bankruptcy filing are at least $2 million. Private companies without public debt must report at least $10 million in either assets or liabilities at the time of filing.

Companies that went bankrupt between Nov. 2 and Nov. 15 include shale gas producer Gulfport Energy Corp., holding company Transformation Tech Investors Inc., gym chain You Fit Health Clubs and California-based online cryptocurrency platform Cred Inc.

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Oklahoma City-based Gulfport Energy, which claimed liabilities of more than $1 billion, filed for Chapter 11 bankruptcy protection Nov. 13. The company has secured $262.5 million in debtor-in-possession financing, with $105 million in new money available upon the bankruptcy court's approval. You Fit Health Clubs filed for reorganization under Chapter 11 on Nov. 9.

Transformation Tech Investors owns 100% of the interests in Interface Security Systems LLC, a subsidiary of Interface Security Systems Holdings Inc. As part of Transformation Tech's Chapter 11 reorganization, the company is seeking to sell its interests in Interface Security Systems LLC to current equity-holders, serving as a stalking horse bidder, who have committed to invest significant capital in ISS, according to an affidavit from Mark Pape, an independent director at Transformation Tech.

Editor's note: This Data Dispatch is updated on a bi-weekly basis and the last edition was published Nov. 3. Market Intelligence may remove companies from this list if it discovers that their total assets and liabilities do not meet the threshold requirement for inclusion.

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