According to data released by S&P Global Market Intelligence, U.S. corporate bankruptcies have reached a year-to-date total of 402 as of July. This marks the second-highest year-to-date total since 2010, with July alone seeing 64 new bankruptcies.
The combination of high interest rates and a challenging operating environment has pushed many U.S. companies over the brink. The current number of bankruptcies is nearly double the figure for the same period in 2022, although it falls slightly short of the 407 bankruptcies recorded in 2020 during the height of the COVID-19 pandemic.
In fact, to find a higher number of year-to-date bankruptcies, one would have to go back to 2010 when there were 530 bankruptcies following the collapse of Lehman Brothers during the Global Financial Crisis.
The month of July saw a total of 64 companies filing for bankruptcy, the highest since March’s figure of 70. In comparison, July 2020 had 74 bankruptcy filings, while June 2020 saw 71 companies filing for bankruptcy.
Among these filings, the largest bankruptcy in July was by Voyager Aviation Holdings LLC, which filed for a $1 billion-plus restructuring as part of its acquisition by Azorra Explorer Holdings Ltd. This was the only bankruptcy exceeding $1 billion in July, down from four in June.
In terms of sectors, the consumer discretionary sector accounted for three filings in July, bringing its year-to-date total to 48. The industrial and healthcare sectors also experienced increases, with eight new filings in the industrial sector and seven in the healthcare sector, bringing their year-to-date totals to 45 and 39, respectively.
This ongoing trend of increasing bankruptcies indicates the challenging times faced by U.S. companies in the current economic landscape. Despite efforts to recover and rebound, many businesses are struggling to keep afloat amidst high interest rates and a difficult operating environment.
Also read: How will Overstock’s new Bed Bath & Beyond be different? All your questions answered.
