https://www./marketintelligence/en/news-insights/latest-news-headlines/us-corporate-bankruptcies-just-below-14-year-high-as-november-filings-surge-86660399US corporate bankruptcies just below 14-year high as November filings surge
A jump in US corporate bankruptcy filings in November will likely push the 2024 total to a new 14-year high. There were 69 bankruptcy filings by public and certain private companies in November, according to the latest data from S&P Global Market Intelligence. This marks the second-most bankruptcies filed in one month since early 2021.
Over the past five years, bankruptcy filings typically slowed in November. This year's spike contrasts with that trend, raising the year-to-date total to 634, nearly matching the full-year totals of 636 in 2023 and 638 in 2020. Should 2024 surpass those years, total bankruptcy filings during the year would amount to the largest single-year total since the aftermath of the Great Recession in 2010. Bankruptcy filings have accelerated in 2024 as businesses face ongoing pressure from high interest rates, inflation and changing consumer spending patterns. While the US Federal Reserve has begun lowering its benchmark interest rate from a 20-year high, the pace of further cuts may slow in 2025 amid challenges posed by persistent inflation and potential tariffs implemented by President-elect Donald Trump. However, Trump's election victory in November did provide an initial boost to stock markets and investor risk appetite. Notable filings The four bankruptcies in November — each with liabilities exceeding $1 billion at the time of filing — were Chapter 11 reorganizations by H-Food Holdings LLC, Spirit Airlines Inc., Wellpath Holdings Inc. and Franchise Group Inc.
Franchise Group said Nov. 3 that it entered into a restructuring support agreement with the majority of its first-lien debt holders on a plan to strengthen the capital structure for its portfolio of brands, which includes furniture and specialty retail stores. Similarly, healthcare provider Wellpath reached an agreement with most of its first- and second-lien lenders to sell one business segment and reorganize another, according to a company statement.
During its reorganization, budget airline operator Spirit Airlines received a $350 million equity investment commitment from its existing bondholders and will complete a deleveraging transaction to equitize $795 million of funded debt, the company said Nov. 18. H-Food Holdings, together with its packaged food manufacturing affiliate Hearthside Food Solutions, plans to reduce its debt load by more than $1.9 billion and secure $200 million of new equity capital through reorganization, according to a Nov. 22 statement.
Sector breakdown Companies classified within the consumer discretionary and consumer staples sectors collectively accounted for 17 of November's bankruptcy filings, as businesses with the most exposure to tighter consumer budgets continue to face the most economic pressure. Companies within the industrial sector filed 10 bankruptcies during the month.
Healthcare companies have filed 62 bankruptcies through the first 11 months of the year, the third-highest pace among the 11 sectors tracked by Market Intelligence. However, the sector added only three bankruptcies in November. Year to date, about 276, or 44%, of all bankruptcies were filed by companies in the consumer discretionary, consumer staples, industrial or healthcare sectors.
This Data Dispatch is updated regularly. The last edition was published Nov. 12. Bankruptcy figures include public companies or private companies with public debt with a minimum of $2 million in assets or liabilities at the time of filing, in addition to private companies with at least $10 million in assets or liabilities. S&P Global Market Intelligence may remove companies from this list if it discovers that their total assets and liabilities do not meet the threshold requirement for inclusion. |
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