US corporate bankruptcy filings rose again in December 2023, closing out a year with the most filings since 2010.
S&P Global Market Intelligence recorded 50 bankruptcy filings in the month. The total was up from a revised 33 recorded in November, but roughly in line with the monthly average of just under 54 bankruptcies for 2023.
There were 642 total filings in 2023, significantly above the previous two years and marginally more than in 2020, which saw a flurry of COVID-19 pandemic-related filings. Although investors expect the Federal Reserve to cut interest rates as early as March, companies will still have to contend with relatively high interest rates and robust wage growth in the near term.
Notable filings
Amid persisting challenges in the commercial real estate sector, Pennsylvania Real Estate Investment Trust filed for bankruptcy Dec. 10. The real estate investment trust, which has a portfolio largely consisting of shopping centers on the East Coast, said inflation and rising interest rates had negatively impacted the company's post-pandemic operating conditions.
Electric scooter and bike provider Bird Global Inc. also sought bankruptcy protection Dec. 20, to achieve profitability. The company operates in 350 cities globally; its Canadian and European operations were not affected by the filing.
Pennsylvania Real Estate Investment Trust was the only company with more than $1 billion in liabilities to file for bankruptcy in December, bringing the total number of such filings for 2023 to 22. One of those larger filings, Diamond Sports Group LLC, continues to play out in court while the company renegotiates broadcast agreements and seeks to fend off liquidation.
Sector breakdown
Seven industrials companies and seven consumer discretionary companies filed for bankruptcy over the month, followed by six filings among information technology companies and six from the healthcare sector. Consumer discretionary companies recorded the most bankruptcies in 2023 with 82 filings.
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Bankruptcies among consumer discretionary, industrials and healthcare companies far outpaced all other sectors on an annual basis.
Leading states
There were bankruptcy filings in 19 states and the District of Columbia in December, with the greatest number originating from California, Texas and Florida.
During the year, 95 California companies sought bankruptcy protection, followed by 75 from Texas and 68 from Florida. New York added 58 filings in 2023, while New Jersey registered 31.
Additional states with 15 or more filings in 2023 included Massachusetts, Georgia, Nevada, Illinois, North Carolina and Pennsylvania.
This Data Dispatch is updated regularly. The last edition was published Dec. 8, 2023.
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.
