US bankruptcies slowed in September after spiking in August, although the pace of filings is still on track to exceed the 2023 level and approach the 2020 total.

There were 59 bankruptcy filings by public and certain private companies in September, down from 63 in August, according to the latest data from S&P Global Market Intelligence. This represented the median number of monthly bankruptcy filings for 2024 through the end of September.

September's bankruptcy filings bring the 2024 total to 512 for the first nine months of the year. This is higher than the 504 filings in 2023 and near the 518 filings in 2020 for the same period.

Over the past decade, full-year bankruptcy filings were at their highest in 2020 and second highest in 2023. Bankruptcy filings this year continue to trend toward these levels amid ongoing inflation and higher interest rates. However, economic conditions could become less restrictive in the coming months after a September cut to the US Federal Reserve's benchmark interest rate and recent indications of cooling inflation.

Notable filings

Three of the five bankruptcy announcements in September with liabilities over $1 billion at the time of initial filing involved companies in the consumer discretionary sector. These are Big Lots Inc., Tupperware Brands Corp. and Wheel Pros LLC.

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Big Lots said in a Sept. 9 statement that it had initiated voluntary Chapter 11 proceedings to facilitate an agreement under which an affiliate of private equity firm Nexus Capital Management LP would acquire substantially all of the discount retail chain's assets and ongoing business operations. The discount retailer operates 1,389 stores in 48 states and an e-commerce platform.

Tupperware aims to use the bankruptcy process to pursue strategic alternatives to support its "transformation into a digital-first, technology-led company," the household product manufacturer disclosed in a Sept. 18 filing.

In the healthcare sector, industry leader Johnson & Johnson created a subsidiary, Red River Talc LLC, that would house the liabilities related to litigation against the company and subsequently file for bankruptcy in an attempt to resolve all current and future claims from consumers alleging damages from its cosmetic talc products, according to a Sept. 20 statement. This is Johnson & Johnson's third attempt to use the bankruptcy process for this purpose.

There have been 26 bankruptcy filings with more than $1 billion in liabilities in 2024 through the end of September.

Sector breakdown

There have been 81 bankruptcy filings among consumer discretionary companies through September as the sector continues to be hit the hardest by increasingly budget-conscious consumers. US consumer spending showed signs of slowing in August as retail sales were flat from July.

Primary sector data was available for 314 of the 512 bankruptcy filings through September. The 189 cumulative filings in the consumer discretionary, industrials and healthcare sectors have outpaced other sectors this year, accounting for about 60% of filings for which sector data was available and 37% of total filings.

Among individual US states, California and Texas had the highest number of companies that have filed for bankruptcy since 2010, with over a thousand corporate filings in each state.

This Data Dispatch is updated regularly. The last edition was published Sept. 9.

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.