Bankruptcy blitz highlights the end of the easy-money era

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When Vice Media filed for bankruptcy this week, it was one of seven large Chapter 11 bankruptcies in a two-day span that started on Sunday.

Why it matters: That’s a lot — and more are likely on the way. Vice’s bankruptcy documents tell the story in painstaking detail of what happens when the easy-money era comes to an end.

The big picture: That era ended just over a year ago when the Federal Reserve embarked on one of the steepest and fastest rate-hiking campaigns in history — and it takes about that long for the consequences to really start trickling through the market.

  • One of the most visible effects is bankruptcy: more filings, and bigger.

State of play: The blitz that started off the week is a “highly unusual” pace of filings, as Petition, a must-read bankruptcy newsletter, noted.

  • If the pace in the second half of this month matches the first half, May will clock the highest monthly tally of large corporate bankruptcies so far this year, figures from show. (Large filings are defined as those with liabilities of $10 million or more.)
  • And don’t forget: Filings in Q1 had already jumped to their highest point since the bout of distress at the start of the pandemic.

Zoom out: Though Vice faced challenges specific to digital media, its “first day declaration” by chief restructuring officer Frank A. Pometti is all about that sweet, sweet access to capital.