Bankruptcy filings down 10 percent in 2002
By Andrew Gomes
Advertiser Staff Writer
Bankruptcy filings by Hawai'i residents and businesses yesterday ended the year down 10 percent, the second decrease in recent years and one of the best improvements in the nation.
A total of 4,516 bankruptcies were filed in 2002 in Honolulu, compared with 5,025 in 2001.
The 10.1 percent drop counters a national trend of rising bankruptcies, which were up 7.7 percent to a record 1.55 million cases during the 12 months ended Sept. 30, according to the latest data from the Administrative Office of the U.S. Courts.
Hawai'i's decline during the 12-month period through the end of September was third best among U.S. districts, behind North Dakota and the Virgin Islands.
The continued decrease in Hawai'i bankruptcies during the fourth quarter will likely keep the state among the most improved nationwide.
Hawai'i's rate was the lowest since 1997 when 4,463 bankruptcies were filed, according to American Bankruptcy Institute statistics.
The number of local business bankruptcies, about 40, was dramatically lower in 2002, compared with corporate cases between 63 and 275 annually over the past 20 years, according to filings and the bankruptcy institute.
Among business filings last year were reorganizations by American Movers, Malama Spa and Summit Communications. There were also several asset liquidations of restaurants, high-tech firms WorldPoint and Viata, and bankruptcies involving construction companies, a tour operator and real-estate developers.
Personal bankruptcies, mainly Chapter 7 asset liquidations, accounted for about 99 percent of all Hawai'i bankruptcies in 2002.
Bankruptcy lawyers and an economist said factors keeping bankruptcies down include low interest rates, a low unemployment rate, rising personal income and appreciating home values.
Observers also noted that reaction to the post-9/11 economic crisis combined with anticipated reforms that would have made it tougher to qualify for bankruptcy led 2001 bankruptcies in Hawai'i to its third-highest level ever.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
