April 3 (Bloomberg) -- Bankruptcy filings by larger companies liquidating or reorganizing in Chapter 11 in the first quarter rose 78 percent from the same period a year earlier and almost tripled from 2007 as the U.S. was mired in the 15th month of a recession.



Almost 131,000 bankruptcies of all types were filed in March, the most for any month since 2005, when Congress erected barriers to individuals looking to rid themselves of debt.



Filings increased 9.2 percent in March over February, according to data compiled by Automated Access to Court Electronic Records, a service of Jupiter ESources LLC in Oklahoma City. March bankruptcies rose 38 percent from a year earlier and 79 percent from 2007.



The surge of filings in March “suggest that earlier estimates of 1.4 million to 1.5 million cases in 2009 should be revised to somewhere in the 1.5 million to 1.6 million range,” said Mike Bickford, president of AACER, a bankruptcy data and management service. If Bickford’s high estimate proves correct, 2009 filings would exceed 2008 by about 45 percent.



Public companies filing for bankruptcy or reorganization through March 31 had a combined $101 billion in debt, according to a report earlier this week by Bankruptcydata.com. That’s almost ninefold higher than the $11.7 billion in the same period last year.



The spike in bankruptcy filings comes as unemployment jumped in March to the highest level since 1983. In the month, 663,000 Americans lost their jobs, bringing the jobless rate to 8.5 percent.

$1T hit to pensions could cost taxpayers, workers

04/04/2009 | 09:31 AM

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SANTA FE, New Mexico — Massive investment losses sustained by public pension funds are pressuring state lawmakers from New Mexico to New York to spend more taxpayer money to shore up their programs, boost the retirement age for newly hired government workers and seek more from employee paychecks.



Pensions need $270 billion in additional contributions over the next four years, and more than $100 billion annually for two decades hence, according to the Center for Retirement Research at Boston College.



The pension trouble is just one more economic challenge for states. Income and sales tax collections are dropping fast as unemployment rises. Jobless benefits funds are running dry, requiring federal borrowing. And because of substantial budget holes, states are cutting back on a wide range of services, including child care subsidies for low-income families and aid to public schools, and in some cases laying off workers.



But as bad as the budget picture looks, it is dwarfed by the size of the gaps in states' pensions, which have collectively lost at least $1 trillion as financial markets swooned over the past year. Public pensions cover about 14 million state and local employees and paid out almost $163 billion to seven million retirees in 2006-2007, according to the Census Bureau.



Because pensions involve long-term obligations and investments, there's no immediate risk that states will be unable to pay retiree benefits. But replenishing pensions could squeeze states for years to come, forcing lawmakers and governors to juggle their spending priorities — pitting pensions against schools, colleges, health care, prisons and other government services.



"What you hear concern about out there right now is, 'We the taxpayers are going to be stuck with a bill paying for public pensions. And we don't want taxes raised to pay for public pensions.' And that is understandable," says Mike Burnside, executive director of the Kentucky Retirement Systems.



Pensions covering state and local workers, police and teachers in Kentucky have unfunded liabilities of $27 billion. In response, lawmakers agreed last year to increase taxpayer funding and change eligibility for newly hired employees. But budget problems, Burnside said, could undermine the state's ability to boost pension funding.