Looking At Some Of The Largest Bankruptcies In U.S. History
From the average consumer, to the large fortune 500 company, everybody can, and does, file for bankruptcy. But what are the biggest bankruptcies in history? Obviously, these would be corporate bankruptcies, but what were the largest companies ever to file for bankruptcy?
Here are the largest companies to file for bankruptcy:
- Lehman Brothers – Lehman brothers was a casualty of the economic meltdown that happened in the late 2000s. Lehman brothers had a lot of capital in mortgage assets, which took a huge dive when the economy collapsed-and when those investments didn’t pan out as expected.
- Washington Mutual – You can just repeat the same thing as Lehman brothers for this one—a lot of money in unstable mortgage investments in the late 2000s led to a collapse and eventual takeover.
- Worldcom – This 2002 bankruptcy of a former tech giant lead to a bankruptcy, with allegations of fraud and scandals surrounding the company at the time
- General Motors – In 2009, poor sales lead to this automotive giant having to file bankruptcy
- CIT Group – Another casualty of the credit crunch in late 2009, this lender was unable to find the financing it needed to stay afloat
- PG&E – Pacific Gas and Electric, the largest energy provider in the West, found itself in financial trouble after wildfires in California in 2017-2018 led to numerous claims against it and other liabilities that it ended up owing. PG&E is actually on the list twice, having also filed for bankruptcy in 2001 from a massive drought.
- Enron – This $65 billion bankruptcy happened when fraud allegations surfaced.
- Conseco – This 2002 bankruptcy happened due to a federal investigation, and the value of its stocks falling.
- MF Global – A financial broker, this company’s $41 billion bankruptcy happened when it became involved in European bonds that failed.
- Chrysler – This well known car company’s problems led to its 2009 bankruptcy when sales could not keep up with the money needed to stay afloat.
Of all the bankruptcies that made the top 20 list, nine of them happened around the financial crisis of 2008-2009. Bear in mind that these bankruptcies were not adjusted for inflation, which means that more recent bankruptcies showed a higher value. Even in the absence of such adjustment, it’s easy to see how significant the crash of 2008 actually was.
Retail Specific Bankruptcies
In the retail section, 2017-2018 bankruptcies included companies like The Limited, Payless Shoes, Perfumania, True Religion, Claire’s and Aerosoles. Many of these companies are still around today—a testament to Chapter 11 bankruptcy’s ability to keep companies going after a reorganization.
Additionally, since many COVID-related 2020 bankruptcies are still pending, it remains to be seen whether some of the companies in bankruptcy today will end up on this list.