Business bankruptcy restructuring in Texas declined 20 percent in 2014 and plummeted more than 56 percent during the past five years. Experts point to a booming economy, low interest rates, an unprecedented access to cash through the emergence of a shadow banking system and the ballooning cost of litigating a case in bankruptcy court. But the streak may end in 2015 thanks to falling oil prices.
“There is going to be a horrible re-awakening in March when E&P companies are required to reset their borrowing basis based on reserves,” says William Snyder of Deloitte. “We will see massive hemorrhaging in the smaller oil and gas companies. By May and June, we are going to see a lot of pain out there.”