Record breaking amount of companies filed for bankruptcy

A new record of 46 billion-dollar companies have filed for bankruptcy this year, passing the record of 38 billion-dollar companies from 2009 during the Great Recession. According to Market Insider who cited the Financial Times, 46 companies with at least $1billion in assets each have filed for Chapter 11 bankruptcy since August this year. That means that number could still rise before the New Year and set the new record for filings of companies this size.


A reported 157 companies of smaller size, averaging at assets of $50 million, have filed for Chapter 11 bankruptcy. Among these are recognizable retailers like “JCPenny, Brooks Brothers, and Neiman Marcus”.  The energy industry has also suffered a loss with gas companies, coal companies, and electric companies filing for bankruptcy. In the midst of the pandemic, gas prices fell so far they were in the negatives, thus sending companies like “Chesapeake Energy, Whiting Petroleum, and Diamond Offshore Drilling”.


The Financial Times sourced Ben Schlafman, the operating chief of New Generation Research at (where they found this information), who believed the bankruptcy filings would only increase from here. ‘”It will spread far across industries as we get deeper into the crisis”’ he told the Financial Times, and warned people that “it’s going to be a bumpy ride.”


In regards to smaller corporations with public debt, an estimated 424 have filed so far.  Market Insider speculated the reason for these filings: “The surge in corporate bankruptcies is striking because the Federal Reserve and Treasury have taken unprecedented steps to shore up markets and buttress the economy in recent months. Their efforts range from buying corporate bonds to bailing out the airlines and mailing stimulus checks to households.”


At this point, it’s unclear as to when the bankruptcy filings will plateau and then descend again for these businesses.  Chapter 11 business filings are intended for large corporations to have the government financially restructure their debt. It is not intended for individuals or small businesses since it is such a complex arena to enter into as a business with assets below the millions.

“Creative Company Conference 2011” by Sebastiaan ter Burg is licensed under CC BY-SA 2.0