US corporate bankruptcy filings hit a 14-year high in 2024 as filings continued at a steady clip in December 2024 and extended a trend from previous months.

December's 61 bankruptcy filings by certain public and private companies brought the 2024 total to 694, according to the latest data from S&P Global Market Intelligence. This surpassed the 635 filings in 2023 and the 638 filings in 2020, a previous 10-year high set during a year that was significantly impacted by the COVID-19 pandemic. The 2024 total amounts to the largest single-year tally since 2010, during the aftermath of the Great Recession.

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Businesses continued to face pressure in 2024 from elevated interest rates, especially as total debt among credit-rated nonfinancial US companies reached a quarterly record of $8.453 trillion and interest coverage remained weak in the third quarter of the year, according to Market Intelligence data. While some relief came in September when the US Federal Reserve began lowering its benchmark interest rate from a 20-year high, the central bank's monetary easing may slow in 2025.

Notable filings

The largest bankruptcies in December 2024 were announced by Party City Holdco Inc. and China Construction America Inc. Both bankruptcies were filed as Chapter 11 reorganizations with over $1 billion in liabilities.

Party City was unable to overcome severe macroeconomic headwinds even after eliminating nearly $1 billion in debt during a 2023 restructure process, according to a company statement dated Dec. 21, 2024. The specialty retailer is now in the process of closing its operations, which consist of about 700 stores in the US.

China Construction America filed for bankruptcy as a strategic action to protect itself from claims or further litigation as it pursues an appeal to a New York State Supreme Court decision involving a dispute with BML Properties Ltd., according to a company statement. China Construction America is a US subsidiary of China State Construction Engineering Corp. Ltd.

Sector breakdown

Companies classified within the consumer discretionary and industrials sectors each accounted for nine bankruptcy filings in December, the most out of the 11 sectors tracked by Market Intelligence. There were a combined 196 bankruptcy filings in these two sectors in 2024, accounting for 28% of all filings for the year.

The consumer discretionary sector has been particularly susceptible to economic headwinds, even with strong overall US retail sales activity, as consumer buying trends have shifted and budgets have tightened due to inflation.

Healthcare companies filed 65 bankruptcies in 2024, the third-highest number of filings among the 11 sectors. The sector added only two bankruptcies in December.