LV bankruptcies jumped 35 percent in 2001 slowdown

Grace Leong

Wednesday, Feb. 20, 2002 | 10:44 a.m.

Personal bankruptcy filings in the Las Vegas area climbed 35 percent to 13,394 in 2001, while business filings jumped 33 percent from 2000, the U.S. Bankruptcy Court in Las Vegas reported Tuesday.

Rising unemployment and a growing number of individuals carrying record-level debt are key factors behind the jump in personal bankruptcy filings, said Ronald Cundick, assistant U.S. Trustee with the Justice Department.

The number of Chapter 7 liquidation filings jumped to 9,423 in 2001 compared with 6,751 in 2000, while the number of Chapter 13 bankruptcy filings rose to 3,971 in 2001 from 3,158 in 2000.

"Part of the rise in Chapter 7 filings is due to more debtors converting from Chapter 13 to Chapter 7. These debtors may have lost their jobs while they were paying through their Chapter 13 plan and don't have the ability to do so anymore," Cundick said.

A slowing economy caused business filings to jump to 120 in 2001 from 90 in 2000. Cundick said the $1.2 billion Aladdin hotel-casino's Chapter 11 filing in September was the largest corporate bankruptcy in Las Vegas in 2001. The hotel-casino listed total assets of $698 million and liabilities of $593 million.

He said Las Vegas real estate companies account for 52 of the 120 business filings, with the largest real estate filing in 2001 made by E.A. Collins Development. The company listed liabilities of $97 million.

Other large Las Vegas real estate developers that filed for protection in 2001 include Craig Road Villas, Imperial International Realty, Shelby's Creek Apartments and Levitz Plaza, an affiliate of Saxton Inc.

"These companies may have filed because mortgage payments on their property were due or they can't pay their workers and contractors because project sales aren't moving fast enough or because they have difficulty getting development refinancing," Cundick said.

Nationwide, a record 1.45 million Americans filed for personal bankruptcy protection in 2001, up 19 percent from 2000, and business filings jumped 13 percent last year, the Administrative Office of the U.S. Courts reported.