A sharp drop in business bankruptcy filings has restructuring advisory firms scrambling for crumbs of business. Some 29 attorneys signed up to pitch their services to the creditors committee of U.S. regional airline Mesa Air Group, which filed for Chapter 11 protection in early January.
Another 17 financial advisers showed up at the so-called beauty pageant, anxious for new business..
“It’s definitely a shift,” said Ed Albert, managing director at Macquarie Capital (USA) Inc, who attended the gathering. “A sea of people is showing up. There are fewer bankruptcy filings, and a lot more restructuring firms were created in the last three years.”
Bankruptcy filings of publicly traded companies dropped by a third in December and January, year to date, compared to the same period last year, according to bankruptcydata.com.
“It’s significant that a lot of firms at Mesa were debtor firms, which typically pursue the bigger debtor cases for bigger fees,” said Albert, who is also co-head of Macquarie’s New York restructuring advisory business.