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New data shows that bankruptcies for US companies have increased to the highest level in the first quarter since 2010.
S&P Global Market Intelligence reported that 188 bankruptcies were filed with large US companies from January to the end of March, up from 139 bankruptcy filings in the first quarter of 2024.
188 bankruptcies in the past three months have been the most common in the first quarter since 2010, when 254 bankruptcy filings were filed for.
“Companies with particularly weak balance sheets continue to face challenges as their debt matures and they need to refinance at a higher interest rate than they were issued,” writes S&P Global.
Chapter 11: EV Maker Nikola File for Bankruptcy Protection
Craft retailer Joan Fabric was one of the most well-known bankruptcy filings in the first quarter of this year. (Read Eagle via Tim Leedy/Medianews Group/Getty Images/Getty Images)
The report noted that for non-investment-level companies, financial metrics based on market information data indicate that these companies are dealing with rising debt pressures and that they can pay a small amount of interest on cash on hand.
The maximum number of bankruptcies in the first quarter of this year occurred in the industrial sector at 32, followed by consumer discretion at 24. These sectors account for almost 30% of first quarter bankruptcies.
S&P Global noted that the S&P 500's industry and consumer discretion segments fell 0.53% and 13.97% in the first quarter, respectively.
Chapter 11 Hooters File for Bankruptcy
Genetic testing company 23andMe filed for bankruptcy earlier this year. (Smith Collection/Gad/Getty Images/Getty Images)
The prominent companies that filed for bankruptcy over $1 billion in debt in the first quarter were F21 OPCO LLC, owner of the Forever 21 apparel chain, and F21 OPCO LLC, along with electric car makers Nikola and Crafts Retailer Joann.
Other notable companies that took part in the bankruptcy process include restaurant chain hooter and genetic testing company 23andMe.
Chapter 11 A month after filing bankruptcy, craft retailer Joanne closes all US stores
EV maker Nicola filed for bankruptcy earlier this year. (Andreas Gebert/Bloomberg via Getty Images/Getty Images)
Despite rising corporate bankruptcies in the first quarter compared to last year, they were far below the level of bankruptcy seen during the financial crisis.
Since 2020, the highest monthly total of bankruptcy filings was in July 2020, when there were 74 bankruptcies.
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