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April's US corporate bankruptcies reached a concerning milestone, hitting the highest monthly level in a year. To provide insights into this trend, RapidRatings Executive Chair James Gellert joins Asking for a Trend.

The uptick in bankruptcies is not limited to the United States alone, as companies globally have been grappling with similar challenges, Gellert notes. He explains that the beginning of the second quarter of 2024 witnessed "the highest incidence of Chapter 11 filings in a year."

Gellert attributes this surge in bankruptcies to the aftermath of a period characterized by cheap capital, low interest rates, and post-pandemic funding, which had previously allowed companies to stay afloat. He even points to Red Lobster's own filing as a timely example. However, with the changing economic landscape, companies now face significant pressure, leading to the current wave of bankruptcy filings.

Retail, entertainment, and the food and auto industries are among the sectors bearing the brunt of this strain, Gellert notes. He cites the shifts in consumer behavior in the post-COVID era as a contributing factor to the deterioration within these industries.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Angel Smith