Bankruptcy boom is fertile ground for beat reporters

Late Sunday night General Motors Corp. received a judge's approval for the next phase of the Detroit-based manufacturer's Chapter 11 bankruptcy reorganization, in which it will sell most of its assets to a government-owned company that will become the new GM.

The once mighty automaker may have the largest bankruptcy case pending, but it's not necessarily the most important to your audience. Staying abreast of troubled businesses in your region is crucial because their financial woes will echo throughout the job market, real estate market, tax base and other areas that affect your audience's well-being. Corporate bankruptcies can signal last-ditch turnaround efforts and a lifeboat amid a sea of red ink. Small businesses filing for liquidation reflect the end of someone's dream and imminent changes to neighborhoods, shopping districts or at the very least fewer options for consumers and job seekers.

Business bankruptcy filings were up 64 percent in the first quarter of 2009 compared to the same period in 2008, according to the American Bankruptcy Institute. That compares to a year-over-year increase of 34.5 percent for individual filings, meaning that companies are filing at close to twice the pace of people. According to the ABI, some 14,319 firms filed for protection from creditors in the first three months of this year – and at that pace, there are likely some poignant and cautionary bankruptcy tales in your territory.

The ABI is a not-for-profit organization that studies insolvency, and its Web site features a plethora of news and statistics, sorting them by state, by judicial district and other criteria. The ABI also offers educational webinars and teleconferences, a research database, expert commentary and links to other resources as well as FAQs and other information you can highlight in consumer stories.

Bankruptcy suits – which essentially are a plea to the court to freeze obligations to creditors -- are handled in federal court; visit the U.S. Bankruptcy Court site for a primer on types of filings for companies and individuals as well as a glossary and other basic background.

The court locator on that site will show you which federal district handles bankruptcy filings in your area. If it’s nearby, you can make periodic in-person visits to peruse filings and talk with trustees and judges about trends, as well as attend hearings. If the nearest court is out of range or if you want to make more frequent checks, register for an account with PACER, which stands for Public Access to Court Electronic Records. It’s not free – generally 8 cents a page whether you view them online or print them -- but it’s a lot more efficient than trekking to court every day if you’re serious about catching bankruptcy filings as soon as they hit the court clerk’s office.

Two other sites used by seasoned bankruptcy reporters are those of private consultants that post synopses, contact information for key players and often court documents for cases they are handling. You won’t necessarily get the scoop on new filings at these sites, but they are a helpful and cost-effective way to stay abreast of bankruptcy suits you’ve decided to follow. The firms, which provide a variety of services to restructuring companies, are Epiq Systems and Kurtzman Carson Consultants.