US corporate bankruptcies filed year-to-date have exceeded annual totals for both 2021 and 2022 as companies continue to face high interest rates and a tight labor market.
S&P Global Market Intelligence recorded 459 bankruptcy filings in 2023 as of Aug. 31, more than the full-year totals for 2021 and 2022. The year-to-date figure is also higher than the comparable total for all but two of the prior 13 years.
Fifty-seven companies sought bankruptcy protection in August. While the total was lower than July's 64 filings, it was still markedly above most months in the prior two calendar years.
Notable filings
Proterra Inc. filed for bankruptcy on Aug. 7 and said in a statement that the filing would allow the company to maximize its value by separating each product line. The company, which manufactures commercial electric vehicles and EV technology solutions, said it had faced "market and macroeconomic headwinds" that had impacted its ability to efficiently scale all product lines.
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Another notable bankruptcy filing came from Yellow Corp. on Aug. 6. The trucking company, which employed 30,000 freight professionals, cited a prolonged conflict with the International Brotherhood of Teamsters labor union over a business modernization plan as the primary reason for the company's bankruptcy filing.
In its statement, Yellow also disclosed a pending lawsuit against the union, filed June 26. Yellow cited breach of contract and loss of enterprise value amounting to more than $137 million in damages. The union responded on June 27, denying the allegations and saying it would use "all available legal resources to challenge the meritless accusations put forth by Yellow Corp."
Sector breakdown
Healthcare recorded the most bankruptcies for August but remained outranked by the consumer discretionary and industrials sectors on total bankruptcies filed so far in 2023.
The consumer discretionary has recorded 57 bankruptcy filings through the first eight months of the year, while the industrials sector has 54 filings and healthcare has 51.
The sector breakdown does not cover all corporate bankruptcies. A primary sector was not available for 200 companies that have filed for bankruptcy so far in 2023.
Leading states
The greatest number of US bankruptcies since 2010 has been filed in California, Texas and New York, three of the most populated US states. California accounted for 1,195 bankruptcies over that time frame, followed by 973 from Texas and 665 from New York.
Florida, New Jersey, Illinois, Pennsylvania, Colorado and Georgia all recorded more than 200 bankruptcies from 2010 through August 2023.
This Data Dispatch is updated on a regular basis. The last edition was published Aug. 3.
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.
