Texas Lawyer spoke with him recently about the financial health of many big-name oil and gas, retail, restaurants and travel companies.

The COVID-19 pandemic has been a perfect storm, exacerbating problems for companies, including Chesapeake Energy, which filed bankruptcy last week, and J.C. Penney, which filed bankruptcy last month. Both had faced struggles for several years, and now other well-known corporations are on the brink. How did this happen and what's next?

Joseph Acosta: What is happening is that there are numerous companies in the energy, retail, restaurant and travel sectors that are in financial distress on account of the COVID-19 pandemic, which resulted in the unprecedented shutdown of the retail economy nationwide. A substantial reduction in demand for consumables as well as retail foot traffic, caused by government shelter-in-place orders, have led to much lower commodities pricing in the case of energy and a virtual halt in revenues in the case of retail, restaurants and travel. At the same time, as unemployment has skyrocketed to historic levels (reaching over 13% nationwide in April), outputs in the manufacturing and service sectors have suffered substantially, especially in Texas. According to a report by the Federal Reserve Bank of Dallas last month, these are key metrics for Texas, the second largest economy in the U.S., next to California. Indeed, the service industry comprises 70% of Texas' private-sector outputs, Texas produces 10% of U.S. manufactured goods, and Texas is the No. 1 producer of oil and gas in the nation.

For the companies that were already struggling, like Chesapeake and J.C. Penney, the pandemic was the straw that broke the camel's back. But, they were not the only ones. According to the American Bankruptcy Institute, commercial Chapter 11 filings from January to June 2020 increased 26% to 3,604 from the 2,855 filings during the same time period last year. Rystad Energy, an independent research and analytics company, even predicts that there could be up to 73 and 170 upstream oil and gas company filings this year and next year, if West Texas Intermediate (WTI) remains constant at $30/barrel.

On the retail sector, we are seeing giant company filings every day, including those of Brooks Brothers, Lucky Brands, Muji U.S.C., J. Crew, J.C. Penney, Neiman Marcus, Container Store and GNC,, to name a few. Then, there are those retailers, like Bed Bath & Beyond, that recently announced sales tumbling nearly 50% and massive store closings in the near future. Everyone who has had to cancel their business trips and vacation plans is also aware that the travel industry is hemorrhaging right now.