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A sign pointing to U.S. Bankruptcy Court. REUTERS Chip East

Little increase seen in big bankruptcies in 2013

2/21/2013 COMMENTS (0)

By Tom Hals

Feb 21 (Reuters) - Restructuring professionals do not expect much increase in big bankruptcies this year, but they aren't letting signs of a strengthening economy get them down. Their theme for the year: "Above All, Don't Lose Hope."

That's the conclusion of a survey by Weil, Gotshal & Manges, which asked about 100 restructuring professionals their views on the coming year. Weil, which has a top restructuring practice, also asked respondents to pick a movie theme that best described their outlook.

The theme from the film "Life of Pi" was chosen by 44 percent, topping the more optimistic message of "Silver Linings Playbook." In third place was the bearish message from "Argo."

The survey showed there is little expectation of an increase in Chapter 11 or Chapter 15 bankruptcies worth at least $1 billion. Forty-four percent expected between six and 10 big bankruptcies, while 36 percent forecast between 11 and 15.

In 2012, there were 14 bankruptcies worth $1 billion, which was up from 10 in 2011 but below 2009's level of 19.

According to the survey, retail was once again expected to be a main industry in distress, identified by 42 percent of respondents, followed by publishing, energy, healthcare and media.

Retail has been in one of the top two spots in each of the three years that Weil has done the survey.

Two industries that were named by more than half of respondents in the 2011 survey - commercial real estate and homebuilding - were near the bottom of this year's survey.

Industry and economic data has pointed to a strengthening recovery in the housing market, including a report on Thursday that showed the supply of homes for sale at a 13-year low.

The corporate default rate is expected to remain near its current long-term lows, with about 70 percent of respondents expecting the rate to be between 2 percent and 3 percent.

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