US bankruptcies in 2024 could reach the highest level in over a decade after filings in October continued to trend at an elevated monthly pace.

There were 60 bankruptcy filings by public and certain private companies in October, according to the latest data from S&P Global Market Intelligence. This follows a similar number of filings over the previous two months, with 59 in September and 63 in August. Since the start of 2020, there have only been eight months when more than 60 bankruptcies were filed.

October's bankruptcy filings bring the 2024 total to 570 for the first 10 months of the year, compared with 552 last year and 562 in 2020 for the same year-to-date periods. If the pace of filings in October continues through the next two months, bankruptcies in 2024 will exceed the 638 bankruptcies filed in full-year 2020 to set a new 14-year high.

Many companies continue to struggle with high interest rates, including those that have not been able to successfully restructure or meet the obligations of large debt loads that were issued in 2020 and 2021 at much lower rates. Companies in the consumer discretionary sector, which accounted for the three largest filings in October, also face ongoing challenges as they compete for consumers who are restricting their budgets due to inflation.

Notable filings

The three bankruptcies in October with the largest liabilities at the time of initial filing were Chapter 11 reorganizations announced by American Tire Distributors Inc., True Value Co. and Accuride Corp.. All three companies are classified within the consumer discretionary sector, and they all intend to continue operations during the reorganization process.

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American Tire Distributors said it is now in discussions for an asset purchase agreement that could transition ownership of the company to a group of lenders, according to a statement in October. The aftermarket tire supplier operates over 115 distribution centers.

Accuride, a supplier of wheel end systems for commercial vehicles, reached an agreement with lenders to provide the company with $30 million in debtor-in-possession financing that will support its business through reorganization with a target to emerge from bankruptcy 90-100 days from its Oct. 9 filing, according to a statement. The filing only applies to the company's US entities.

Hardware wholesaler True Value said Oct. 14 it had filed for bankruptcy to facilitate a sale of its business through a stalking horse bidding process in which home improvement industry peer Do it Best Corp. would serve as lead bidder.

Sector breakdown

By sector, October's 60 bankruptcy announcements were led by 11 filings in the healthcare sector. There have been 59 filings from companies in the healthcare sector through the first 10 months of the year.

Year to date through October, consumer discretionary companies continued to lead all sectors with 90 filings. The sector added another bankruptcy in early November with a Chapter 11 filing from restaurant chain TGI Friday's Inc. that involves 39 company-owned locations in the US. The Chapter 11 filing does not include independently owned locations in the US and other countries that are franchised through TGI Fridays Franchisor LLC.

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