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The Bankruptcy Games: Cashing Out in the COVID-19 Slump

In the first six months of the COVID-19 slump, unemployment levels in retail trade and oil and gas extraction were some of the highest among all U.S. industries, eclipsed only by leisure and hospitality. Certainly, bad news for these two industries – but not for everyone employed there. Despite what we have been repeatedly told, we are NOT all in this together. The strategic use of Chapter 11 bankruptcy filings has actually been good for some, especially executives, in these two industries (and elsewhere) and in private equity firms connected to these industries. This pattern is true, even though these two groups – executives and private equity firms – have been largely responsible for the business and financial decisions that drove companies like fracking pioneer Chesapeake Energy and century-plus-old luxury retailer Nieman Marcus, owner of Bergdorf Goodman and MyTheresa, into the financial ditch.

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