Texas touts itself as a place for booming businesses, but more than 750 Texas businesses filed for Chapter 11 bankruptcy in 2016 in federal court.
According to Androvett Legal Media, the Lone Star state saw a 42 percent increase in bankruptcies from 2015. The legal media and marketing firm reports a good portion of the Texas businesses were based in Houston and its surrounding cities, where the economy is largely based on oil and gas.
This year, some legal experts predict the oil and gas industry in Texas will be in better financial condition. That's because the Organization of the Petroleum Exporting Countries (OPEC) – an organization that works in countries all over the world to secure fair and stable prices for petroleum producers – has promised oil production cuts during the first half of 2017.
Experts predict this will most likely help the oil and gas companies get a fair price for their supply, but will also cause prices to rise at the gas pump.
In Austin, 29 businesses filed for Chapter 11 bankruptcy in the Western District of Texas' Austin office in 2016. However, the majority of businesses filing for bankruptcy in 2016 were not oil and gas companies.
Patty Tomasco, who works in the bankruptcy division of Jackson Walker, said last year her practice saw a steady stream of cases dealing with the natural consequences of tech companies.
"With tech companies in Austin, you have a lot of people competing to be the next great app maker or the next great technology company," Tomasco said. "There's always going to be a winner and there's always going to be about 10 losers. The 10 losers are going to have to file bankruptcy and do something else."
The types of Austin businesses that filed for bankruptcy in Western District of Texas' Austin office in 2016 can be broken down into several sections.
A good portion of the businesses fall under miscellaneous which includes startups and small businesses. There are only three oil and gas companies.