The tally of US corporate bankruptcy filings with more than $1 billion in liabilities is on the rise in 2023, according to S&P Global Market Intelligence data.
Six companies, including a Johnson & Johnson subsidiary and the parent of the failed Silicon Valley Bank, are on the billion-dollar bankruptcy list this year as of April 4, the highest year-to-date total since 2018. The increase stems from growth in overall bankruptcy filings, which hit a level higher than any comparable period in the past 12 years as companies battle elevated interest rates and persistently high inflation.
Bankruptcies with more than $1 billion in liabilities represented 3.1% of the overall bankruptcies tracked by Market Intelligence between Jan. 1 and April 4, a drop from 2022, though roughly in line with many prior years.
$20 billion bankruptcy filings in 2022, 2023
Johnson & Johnson subsidiary LTL Management LLC's bankruptcy filing on April 4 marked the sixth filing year-to-date that listed liabilities in excess of $1 billion.
The voluntary Chapter 11 bankruptcy filing included a reorganization plan that will "equitably and efficiently" resolve all claims arising from litigation against Johnson & Johnson and its North American affiliates related to allegations that cosmetic talc found in baby powder products caused ovarian cancer and mesothelioma. In addition, Johnson & Johnson agreed to pay $8.9 billion over the next 25 years to resolve all the related current and future claims, while admitting no wrongdoing.
* For more bankruptcy analysis, check out the monthly Bankruptcy series.
* For retail-specific bankruptcy data, check out the monthly Retail Market series.
Other prominent billion-dollar bankruptcy filings year-to-date included SVB Financial Group's Chapter 11 filing on March 17 following the collapse of Silicon Valley Bank, as well as Sinclair Broadcast Group Inc.'s regional sports business, Diamond Sports Group LLC, filing a voluntary petition for reorganization under Chapter 11 bankruptcy on March 14.
In 2022, 14 bankruptcy filings reported more than $1 billion in liabilities.
Majority of bankruptcies report liabilities between $1 million and $100 million
Most corporate bankruptcy filings in recent years reported liabilities in the $1 million to $100 million range.
Year-to-date as of April 4, 2023, 56.7% of bankruptcy filings have fallen in the $1 million and $100 million liabilities range, while 10.8% of the compiled bankruptcy filings reported liabilities between $100 million and $500 million.
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.
