US bankruptcy filings spiked in August after a July slowdown, leading to the highest total for the first eight months of the year since 2020 and the second-highest since 2010.
There were 63 bankruptcy filings in August of public and certain private companies, up from a revised 49 in July, according to the latest data from S&P Global Market Intelligence. This was the third-highest monthly total this year, behind 72 in June and 68 in April.
With the rise in August bankruptcy filings, there have now been 452 filings through the first eight months of the year. There were 466 bankruptcy filings through the first eight months of 2020, when companies were still grappling with the immediate effects of the COVID-19 pandemic.
US companies continue to struggle with several issues this year, including high interest rates and geopolitical uncertainty. However, the US economy has still proven its resiliency, with real GDP increasing at an annual rate of 3% in the second quarter from the first quarter, according to the Bureau of Economic Analysis' most recent estimate, released Aug. 29.
Notable filings
Three bankruptcy filings in August involved companies with over $1 billion in liabilities at the time of initial filing. These included solar technology and energy services provider SunPower Corp., perfumes and cosmetics wholesale distributor Avon International Operations Inc., and gas station and convenience store operator SQRL Service Stations LLC. SunPower is publicly listed while Avon and SQRL are private.
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A federal bankruptcy court on Aug. 29 approved Complete Solaria Inc.'s $45 million stalking horse bid for SunPower's Blue Raven Solar LLC installation business, new homes business and non-installing dealer network. The court also allowed a stalking horse bidder for SunPower's remaining assets and set a Sept. 10 deadline for additional bids.
Following its initial bankruptcy filing, Avon filed a motion in US Bankruptcy Court on Aug. 14 seeking approval for the sale of substantially all its assets to a successful bidder for a purchase price of $125 million in the form of a credit against its outstanding secured obligations to cosmetics company Natura &Co Holding SA.
SQRL filed a voluntary petition for reorganization under Chapter 11 on Aug. 16 after its Chapter 7 case was dismissed on the same day. Chapter 11 filings typically involve a company seeking to reorganize its operations under court supervision, while under Chapter 7 filings, companies typically liquidate their assets to satisfy outstanding debt.
There have been 21 bankruptcy filings with more than $1 billion in liabilities in 2024 through the end of August.
Sector breakdown
There have been 69 bankruptcy filings in the consumer discretionary sector in 2024. Investor sentiment was most averse toward stocks in the consumer discretionary segment in August due to recession fears, according to the results from the latest S&P Global Investment Manager Index survey.
Primary sector data was available for 278 of the 452 bankruptcy filings through August. Filings in the consumer discretionary, industrials and healthcare sectors have largely outpaced other sectors this year, accounting for about 60% of filings for which sector data was available and 37% of total filings.
This Data Dispatch is updated regularly. The last edition was published Aug. 8.
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.