Bankrupt companies of the United States

Bankrupt companies of the United States
Name	Bankrupt companies of the United States
Founded	Various
Defunct	Various
Industry	Multiple
Location	United States

Bankrupt companies of the United States are firms incorporated in the United States that have sought debt relief through insolvency proceedings such as Chapter 11 of the Bankruptcy Code, Chapter 7 of the Bankruptcy Code, or state receiverships. These cases range from small local enterprises to multinational corporations like General Motors Corporation, Lehman Brothers Holdings Inc., Enron Corporation, and Washington Mutual. Insolvency filings have reshaped sectors including railroads in the United States, airlines of the United States, retail in the United States, and automotive industry in the United States while involving stakeholders such as Federal Deposit Insurance Corporation, Securities and Exchange Commission, United States Trustee Program, and major creditors like JPMorgan Chase, Goldman Sachs, and Bank of America.

Overview and definitions

Bankruptcy in the United States is governed by the United States Bankruptcy Code and administered in United States bankruptcy courts; common procedures include reorganizations under Chapter 11 of the Bankruptcy Code and liquidations under Chapter 7 of the Bankruptcy Code. Entities may also use Chapter 15 of the Bankruptcy Code for cross-border insolvency involving jurisdictions such as the United Kingdom, Canada, and Germany. Key actors include debtors, unsecured creditors like Pension Benefit Guaranty Corporation, secured creditors such as Citigroup, equity holders, and debtor-in-possession professionals including turnaround firms like AlixPartners and McKinsey & Company. Pre-packaged bankruptcies and debtor-in-possession financing have evolved through cases involving Nortel Networks, General Motors, and Delta Air Lines.

Historical trends and major waves

Major waves of corporate insolvency coincide with financial crises and structural shifts: the Panic of 1893 and the Great Depression precipitated railroad reorganizations like Penn Central Transportation Company; the Savings and loan crisis of the 1980s and 1990s led to failures overseen by the Resolution Trust Corporation including regional banks such as Continental Illinois National Bank and Trust Company. The late-20th-century airline restructurings involved Eastern Air Lines, Trans World Airlines, and United Airlines (UAL) after the Airline Deregulation Act. The 2008 financial crisis produced landmark cases like Lehman Brothers and Washington Mutual, with government responses involving the Troubled Asset Relief Program and the Emergency Economic Stabilization Act of 2008. Pandemic-era pressures in 2020–2021 forced bankruptcies for Hertz Global Holdings, Chesapeake Energy, and J. C. Penney Company, reflecting retail and energy sector realignments tied to events such as the COVID-19 pandemic.

Notable bankruptcies by industry

- Automotive: reorganizations and government interventions involved General Motors Corporation, Chrysler LLC, and suppliers such as Delphi Corporation; cases touched United Auto Workers pensions and the Treasury of the United States. - Finance and banking: failures such as Lehman Brothers, Bear Stearns, Washington Mutual, and IndyMac implicated the Federal Reserve System, FDIC, and institutions like Goldman Sachs. - Energy and commodities: major filings included Enron Corporation, Texaco, Chesapeake Energy Corporation, and Calpine Corporation, with impacts on investors like Vanguard Group and BlackRock, Inc.. - Retail and apparel: notable bankruptcies include Sears, Roebuck and Co., Toys "R" Us, J. C. Penney, Neiman Marcus, and Barneys New York, affecting landlords such as Simon Property Group and lenders including Bank of America. - Transportation and shipping: railroad reorganizations (e.g., Conrail origins), airline bankruptcies (Delta Air Lines, American Airlines Group), and maritime restructurings impacted unions like the International Association of Machinists and Aerospace Workers. - Technology and telecommunications: insolvencies such as WorldCom, Nortel Networks Corporation, and restructurings in Silicon Valley influenced investors like Sequoia Capital and Andreessen Horowitz.

Legal framework and bankruptcy processes

Proceedings occur in United States district courts through specialized bankruptcy courts under the supervision of United States Trustees. Chapter 11 permits debtors-in-possession to continue operations while proposing a plan of reorganization negotiated with creditors, committees such as Official Committee of Unsecured Creditors, and stakeholders including holders of pension plans and bondholders represented by firms like Pension Benefit Guaranty Corporation. Asset sales may proceed under Section 363 of the Bankruptcy Code with stalking-horse bids from buyers such as Amazon (company), Walmart, or private equity firms like Apollo Global Management and KKR. Liquidations under Chapter 7 assign trustees who sell assets to satisfy creditor priorities; precedence is governed by statutory lien, secured claim, and administrative expense rules. Appeals reach the United States Court of Appeals for the Second Circuit and, at times, the Supreme Court of the United States.

Economic and social impacts

Corporate bankruptcies affect employees, retirees, suppliers, creditors, and communities; mass layoffs in cases like Circuit City Stores, Inc. or Toys "R" Us influenced local economies and municipal revenues in cities such as Detroit and New York City. Pension and benefit disruptions have invoked the Employee Retirement Income Security Act of 1974 and interventions by the Pension Benefit Guaranty Corporation. Bankruptcies can accelerate industry consolidation, create acquisition opportunities for firms like Amazon (company) and Walmart, and alter capital markets behavior observed after events like the 2008 financial crisis and COVID-19 pandemic.

Case studies of landmark reorganizations

- General Motors (2009): A Chapter 11 restructuring coordinated with the United States Treasury and Canadian government produced a new entity, preserved some union agreements with United Auto Workers, and involved asset transfers to Motors Liquidation Company. - Lehman Brothers (2008): The collapse of Lehman Brothers triggered global market disruption, complex cross-border insolvency litigation, and lengthy asset sales involving firms like Barclays and Nomura Holdings. - Enron (2001): The bankruptcy of Enron Corporation followed accounting scandals involving Arthur Andersen and prompted regulatory reforms including the Sarbanes–Oxley Act of 2002. - Toys "R" Us (2017–2018): A leveraged buyout followed by bankruptcy led to liquidation in the United States, affecting suppliers such as Hasbro and Mattel, Inc. and prompting international restructurings.

Category:Bankruptcies in the United States