Bankruptcy filings soar in Nevada


The economic downturn in Las Vegas has driven bankruptcy filings in Nevada up 64 percent in the first nine months of the year with the rate of consumer bankruptcies surpassing all other states' per capita rate.

There were 21,969 filings in the U.S. Bankruptcy Court of Nevada through Sept. 30, compared with 13,408 filed in the same time period in 2008, bankruptcy court statistics released this week show. That compares with a total 10,874 bankruptcy filings in all of 2007, the statistics show.

The southern division of the court in Las Vegas, which is overseen by three of the four Nevada judges, handles 84 percent of all bankruptcy cases in the state. Last year, the southern division handled 86 percent of all bankruptcies.

Consumer bankruptcies are particularly growing worse in Nevada, with the Silver State surpassing Tennessee this year for the most consumer bankruptcies per 1,000 residents, according to Automated Access to Court Electronic Records.

Nevada reported 11.24 consumer bankruptcies per 1,000 residents versus Tennessee's 8.72 cases per 1,000 residents, the automated court records show.

The increase in Nevada's consumer bankruptcies, which were up 65 percent, also outpaces the national average increase of 35.5 percent through September.

According to the court records, Chapter 7 liquidations account for the bulk of the filings -- 15,635 cases through the end of September. That is 22 percent more than the 12,733 liquidation cases filed in all of 2008.

Chapter 7 cases are filed by individuals, married couples and businesses.

Chapter 13 cases, which require court-ordered repayment plans, have also surpassed last year's numbers with 6,006 cases filed through September compared with 5,469 filed in 2008.

Chapter 11 filings, in which businesses seek protection while trying to reorganize their debts, are also up. There have been 328 Chapter 11 filings this year, 10 percent more than all reorganization cases that have been filed in the past two years.

Some of the high-profile Chapter 11 cases that have been filed this year include locals gaming company Station Casinos, developer Jim Rhodes' real estate companies and the 2,675-acre Park Highlands master plan in North Las Vegas.

While the number of case filings have increased year to year, they have also climbed quarter to quarter this year.

Case filings are up 38 percent from 5,780 in the first quarter ended March 30, compared with the 8,015 cases filed between April and June. Filings increased another 2 percent to 8,174 filings between July and September.

Despite the sharp increase in bankruptcy filings, which has swelled court calendars and increased caseloads for bankruptcy judges and attorneys, people involved in bankruptcy cases say the cases aren't slowing down the courts.

"The court clerks and the judges are doing a good job of getting the cases in and out," court trustee Brian Shapiro said. "I don't see any significant problems. Bankruptcy court kind of flows a lot quicker compared to other courts."

Ryan Works, an associate in the bankruptcy division at the law firm McDonald Carano Wilson, said the courts personnel have "done a good job to account for the surge in these filings. They've done an excellent job in getting us all in (court)."

The biggest challenge for the courts often involves finding free days to hear multiple motions in a case, Works said.

"Certain calendaring events are taking longer now," Works said. "The judges just have to work that much harder to get everybody heard."

The increase in bankruptcy cases has shifted, and sometimes increased, workloads for attorneys, too.

Works said 98 percent of his time is focused on bankruptcy now, but was split with commercial litigation in years past.

"I just don't have any time for state court work anymore," Works said.

Court officials and attorneys say whether the number of bankruptcy filings continues to rise or not will depend on the economy.

And Shapiro joked that until people stop seeing all the commercials for bankruptcy attorneys on television, they'll know the economy isn't improving.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

 

Rules for posting comments

Comments posted below are from readers. In no way do they represent the view of Stephens Media LLC or this newspaper. This is a public forum. Read our guidelines for posting. If you believe that a commenter has not followed these guidelines, please click the FLAG icon next to the comment.