The energy sector rang in 2020 with a wave of bankruptcies, setting the tone for a year that would only get worse. Indeed, the record-setting number of bankruptcies in Texas and by companies with Texas ties was probably only good for bankruptcy lawyers kept busy by wave after wave of filings.

Through the first 11 months of the year, 1,656 companies filed for bankruptcy protection in Texas, a tally from the Texas Lawbook shows. That compares with 610 in the year-ago period. The Lawbook highlighted 76 complex Chapter 11 filings of $250 million or more by companies based in or filing in Texas. Energy companies accounted for the vast majority of those filings.

Retailers, already battered by the increase in e-commerce, were dealt another blow when the pandemic hit and brick-and-mortar shopping for a while came to a complete standstill. Ten major Texas retailers sought protection from the bankruptcy courts, and not all will reorganize.

Among the largest companies to file in 2020 was Arena Energy, an offshore oil and gas business operating in the Gulf of Mexico. It sought bankruptcy protection in August, with more than $1 billion of debt and just $35 million of cash on hand.

Oil field services company McDermott International filed for bankruptcy in January before the pandemic took hold and was able to emerge in June, shedding $4.6 billion of debt and with more than $2.9 billion in fresh credit and loans.

Fewer large Texas retailers sought protection, but there was no doubt the sector was dealt a body blow in 2020. Houston-based womens fashion chain Francescas filed for protection in December and has begun to sell assets to pay off creditors. Tailored Brands, the Houston-based owner of the Mens Wearhouse chain, filed for bankruptcy protection in August and later emerged as a private company. Several big-box retailers such as Texas-based J.C. Penney, Neiman Marcus and Tuesday Morning also sought protection.

rebecca.carballo@chron.com

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Energy sector leads record wave of bankruptcies in 2020 - Houston Chronicle