Business of bankruptcy bustles in Wilmington, Del.

— -- In their long topcoats and dark suits, the men and women bustling down this city's main street might be mistaken for funeral directors.

But they're actually lawyers handling the burial of businesses: bankruptcies.

Here in the center of Corporate America, where more than 60% of Fortune 500 companies are incorporated, the billable clock is ticking.

"It's the bankruptcy capital of the world," says Lynn LoPucki, a law professor at Harvard and UCLA.

Amid one of the worst downturns since the Great Depression, scores of companies have come to the federal bankruptcy court on North Market Street to die or restructure themselves.

More than half of all large public company bankruptcies filed this year have been filed here, including those of media giant Tribune, Washington Mutual, Linens 'n Things, Sharper Image and Mervyns, a California-based department store chain. As of Dec. 11, Chapter 11 filings were more than four times greater than in 2007.

"Last year at this time, we'd have time to breathe in between cases. Now, it's a constant thing," says Clerk of the Court David Bird.

A small part of this activity is spilling over into the small-business community along Market Street, including restaurants, caterers and office supply outlets.

But the city's bankruptcy boomlet isn't translating into a boom for them.

"If you talk to someone who says business is booming, they're lying, unless they're a bankruptcy lawyer," says Leonard Simon, who owns Wright & Simon, a men's clothing store near the bankruptcy court.

"I'm a tiny little business owner, and believe me, it's challenging right now."

Boom times for some

The biggest beneficiaries of the bankruptcy boom are Wilmington's approximately 300 bankruptcy lawyers and their firms.

Some firms are expanding their practices, assigning new associates to bankruptcy or moving lawyers from other areas, such as real estate.

"We have people working sometimes round the clock," says Mark Collins, chairman of the bankruptcy group at Richards Layton & Finger, which was named the most active debtors' counsel for the first half of 2008 by Bankruptcy Insider, a trade publication.