- A record 46 companies with at least $1 billion in assets have filed for Chapter 11 bankruptcy this year, the Financial Times reported, citing BankruptcyData.com.
- The previous record was 38 billion-dollar businesses during the same period of 2009.
- JCPenney, Brooks Brothers, and Chesapeake Energy are among the big companies that have filed for bankruptcy this year as the coronavirus pandemic continues to hammer multiple sectors.
- “It’s going to be a bumpy ride,” Ben Schlafman, operating chief of New Generation Research, which owns BankruptcyData.com, told the Financial Times.
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Billion-dollar US companies have filed for bankruptcy at an unprecedented rate this year as the coronavirus pandemic continues to plague numerous industries.
A record 46 companies with at least $1 billion in assets filed for Chapter 11 bankruptcy as of August 17, the Financial Times reported, citing BankruptcyData.com.
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That figure exceeds the 38 billion-dollar businesses that filed in the same timespan in 2009 — at the height of the financial crisis — and easily surpasses the 18 companies of that size that filed in the same period last year.
Meanwhile, 157 companies with at least $50 million in liabilities have filed for bankruptcy this year, the Financial Times reported. They include 24 retailers with JCPenney, Brooks Brothers, and Neiman Marcus, all seeking protection from creditors in recent months.
Large oil-and-gas companies have also been hit hard. There have been 33 filings in the industry this year, including Chesapeake Energy, Whiting Petroleum, and Diamond Offshore Drilling.
“It’s going to be a bumpy ride,” Ben Schlafman, operating chief of New Generation Research, which owns BankruptcyData.com, told the Financial Times.
“We are in the first innings of this bankruptcy cycle,” he continued. “It will spread far across industries as we get deeper into the crisis.”
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There has also been a flurry of smaller-scale bankruptcies this year. As many as 424 companies declared bankruptcy this year through August 9, according to an S&P Global analysis of public companies and private companies with public debt.
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.
The spike also underscores the disconnect between the distressed US economy and the stock market, as both the S&P 500 and Nasdaq indexes climbed to all-time highs this week.