November 27, 2022

Volume XII, Number 331

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Trends in Large Corporate Bankruptcy and Financial Distress - Midyear 2022 Update

Executive Summary

Following the spike in large corporate bankruptcy filings triggered by the COVID-19 pandemic, bankruptcies in 2021 and 1H 2022 (annualized) decreased to levels below historical averages. The relatively low bankruptcy filing pattern was consistent across most industries, including those with the highest filings following the pandemic: Mining, Oil, and Gas; Retail Trade; Manufacturing; and Services.

This report examines trends in Chapter 7 and Chapter 11 bankruptcy filings between January 2005 and June 2022. Unless specified otherwise, the bankruptcies analyzed in this report involve public and private companies with over $100 million in assets at the time of bankruptcy filing. 1

Number of Bankruptcies

  • A total of 70 companies filed for bankruptcy in 2021, below the annual average since 2005 of 78. (page 2)

  • Of the 70 bankruptcy filings in 2021, 28 occurred in Q1 2021. There were only 15, 12, and 15 such bankruptcies in Q2, Q3, and Q4 2021, respectively. (page 3)

  • In 1H 2022, 20 companies filed for bankruptcy, the lowest midyear total since 2H 2014. (page 3)

Private Company Bankruptcies

  • Bankruptcy filings by private companies constituted 60% of all bankruptcies in 1H 2022, substantially higher than the annual average of 40% from 2005 to 2021.

Mega Bankruptcies

  • There were 20 “mega bankruptcies” (those filed by companies with over $1 billion in reported assets) in 2021, a substantial decline from the 60 mega bankruptcies filed in 2020. (page 2)

  • Only four Chapter 11 mega bankruptcies were filed in 1H 2022. This is considerably below the 2005–2021 half-year average of 11. (page 3)

  • The largest bankruptcies in 2021 and 1H 2022 were filed by Seadrill Limited, with $7.29 billion in assets at the time of filing, and Talen Energy Supply LLC, with $10 billion in assets at the time of filing. (page 6)

Bankruptcy Venues

  • Consistent with prior years, the most common venue for bankruptcy filings was Delaware, which accounted for 34% of all bankruptcy filings in 2021 and 50% of all bankruptcy filings in 1H 2022. (page 7)

Read the full report here. 

Copyright ©2022 Cornerstone ResearchNational Law Review, Volume XII, Number 252
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About this Author

Allie Schwartz Financial Attorney Cornerstone Research New York, NY
Vice President

Allie Schwartz specializes in the valuation of securities and financial derivatives in the context of securities litigation, bankruptcy, and regulatory disputes. She also works extensively on issues affecting financial institutions, such as addressing allegations of anticompetitive behavior, insider and disruptive trading, hedging and risk management, and issues in consumer finance.

Dr. Schwartz has more than a decade of experience supporting experts through multiple stages of litigation, such as deposition, domestic and international arbitration, and trial. She has also provided...

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JB Doyle Cornerstone Securities Analysis
Principal

J.B. Doyle consults on litigation and regulatory matters related to financial institutions and securities. In these areas, he has extensive experience with advanced statistical modeling and large datasets. Dr. Doyle has presented to regulators, and works with clients in all stages of commercial litigation, including class certification, affirmative and rebuttal reports, depositions, arbitration, and trial.

Dr. Doyle’s recent case topics and experience include:

Regulatory investigations

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Nicholas D. Yavorsky Principal Cornerstone Research
Principal

Nick Yavorsky focuses on complex securities, financial institutions, and corporate transaction disputes. He provides accounting, valuation, and damages analyses to clients through all phases of litigation. His experience spans a range of topics, such as the financial crisis, failed financial institutions, financial accounting restatements, bankruptcy, due diligence, and public stock offerings.

Securities class actions  

Mr. Yavorsky has consulted on dozens of Rule 10b-5 and Section 11 class actions to...

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Diego Vega San Martin Associate Cornerstone Research New York, NY
Associate

Education

  • Washington University in St. Louis, Ph.D.
  • University of Chile, M.Sc.
  • University of Chile, B.S.
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