Counting Down the Top 10 Corporate Bankruptcies of All Time
Even the biggest companies can fall into bankruptcy, and when the do, they fall hard. With the help of bankruptcy attorneys, some companies will rise again and actually benefit from their filing. Others will go the way of Trump Airlines.
In total, the 10 biggest bankruptcies in the United States involved nearly $1.5 trillion in assets (or $1,488,300,000,000). Whether you’re an entrepreneur looking for cautionary tales or an Occupy liberal looking for Schadenfreude, here are the top 10 most high-profile, high-cost bankruptcies in U.S. history:
Chrysler: A casualty of the Great Recession, Chrysler and 24 of its subsidiaries filed for bankruptcy in 2009 following the auto industry crisis. A bankruptcy judge ordered Chrysler to sell its assets to a new company. After making its final payments to United Auto Workers, the bankruptcy finally concluded in 2014. Italian-owned Fiat Automotives initially bought 20% of Chrysler’s assets before launching a formal merger. The company is now formally recognized as Fiat Chrysler Automotives.
MF Global Holdings: In 2009, this brokerage company made a $6.3 billion bet on European sovereign debt. When the reports came out that MF Global was investing in the European financial crisis, domestic creditors started demanding more liquid collateral to secure their loans, and stock prices dropped drastically.
Energy Future Holdings Corp: The Dallas-based utility company made a big investment on natural gas that didn’t pay off, and filed for bankruptcy in 2014. At the time, the company had about $40 billion in assets.
Conesco: Conesco, now known as CNO Financial Group, filed for bankruptcy in 2002 after encountering a number of problems stemming from its 1998 acquisition of Green Tree Financial, a leader in mobile home financing.
Enron Corp: Reports of questionable accounting practices (a polite term for fraud) in the 1990s caused Enron stocks to drop quickly before the energy trading company went bankrupt in 2001, just over a year before Conesco.
CIT Group: CIT struggled with funding during the beginning of the recession and the resulting credit crunch of 2009. The company filed for bankruptcy in December of that year.
GM: One of the highest profile automotive crises to date, GM agreed to bankruptcy in 2009 after it became overwhelmed by debt and union deals. It accepted the bankruptcy as part of the government bailout. Following restructuring, GM lost Hummer, Pontiac, Saturn, and Saab, but kept Cadillac, Chevrolet, GM Daewoo (Korea), GMC, Holden, Opel, and Vauxhall Motors — not to mention millions of jobs.
WorldCom: A $4 billion accounting scandal led the long distance phone company to file bankruptcy in 2002. At the time, it was the largest bankruptcy filed to-date.
Washington Mutual Inc: A $16.7 billion, nine-day withdrawal forced WaMu to file for bankruptcy in 2008. This was one of the most shocking filings during the financial crisis.
Lehman Brothers Holdings: Finally, in September 2008, Lehman Brothers filed for the largest bankruptcy in history, which amounted to $639 billion in pre-filing assets — six or seven times more than the second largest filing. Lehman Brothers’ was one of the first dominoes to fall at the beginning of the Great Recession, making it the face of the financial crisis to come.