When a major company declares bankruptcy, the reverberations can be felt throughout the economy. The last decade has witnessed some of the largest in history and MF Global’s recent bankruptcy is just the latest in a string of economy rocking bankruptcies. As investigations are begun, we wanted to look back at some of the other large bankruptcies in American history.
Here are the top 10 largest bankruptcies according to BankruptcyData.com.
#10: Thornburg Mortgage
Thornburg Mortgage was a publicly traded real estate investment trust that originated, acquired and managed mortgages, with a specific focus on jumbo and super jumbo adjustable rate mortgages. Troubles for the firm started in 2007 as the housing bubble began to collapse and it faced multiple margin calls from creditors. Thornburg Mortgages ceased operations after entering Chapter 11 bankruptcy.
Bankruptcy filing: May 1, 2009
Assets: $36.5 billion
Chrysler has been an American automobile icon since 1925. Chrysler saw sales decline steeply in 2008 as the financial crisis spilled from the housing market into other markets. Chrysler was able to secure funding and backing of its warranties from the U.S. government. Chrysler came out of bankruptcy on June 10, 2009, just 41 days after entering bankruptcy protection.
Bankruptcy filing: April 30, 2009
Assets: $39.3 billion
#8: MF Global Holdings
Jon Corzine, a former Goldman Sachs co-CEO and former governor of New Jersey, was appointed CEO in March 2010 with the aim of transforming the broker into an investment bank. On Oct. 25, 2011 MF Global reported a $191.6 million quarterly loss as a result of trading on European government bonds and its debt was downgraded to junk status.
Bankruptcy filing: Oct. 31, 2011
Assets: $40.5 billion
Conseco was an insurance company that was formed in 1979 and provided life insurance, annuity and supplemental health insurance products to more than 4 million customers. Conseco entered Chapter 11 in 2002 and emerged nine months later. In 2010, Conseco’s board approved changing the company’s name to CNO Financial Group.
Bankruptcy filing: Dec. 17, 2002
Enron has become synonymous with accounting fraud. Enron employed 22,000 staff and was one of the world’s leading electricity, natural gas, communications companies. At the end of 2001, its financial situation was revealed to be the result of “creative accounting” and erupted into the “Enron scandal.” Enron emerged from bankruptcy in 2004 for the sole purpose of selling off its assets.
Bankruptcy filing: Dec. 2, 2001
Assets: $65.5 billion
#5: CIT Group
CIT Group is a bank holding company founded in 1908. It provides financing and leasing capital to its more than one million small business and middle market clients and their customers. In 2008, CIT became a bank holding company in order to qualify for, and ultimately receive $2.3 billion in TARP funds. It emerged from Chapter 11 on Dec. 10, 2009, 38 days after entering bankruptcy.
Bankruptcy filing: Nov. 1, 2009
Assets: $80.4 billion
#4: General Motors
General Motors Company faced the same financial difficulties as Chrysler as the financial crisis got underway in 2008 and was forced into bankruptcy in June 2009. With financing partially provided by the U.S. government, GM emerged from bankruptcy on July 10, 2009. It was re-listed on the NYSE on Nov. 18, 2010 with an IPO value of $20.1 billion. The U.S. government still owns a 27% stake in the company.
Bankruptcy filing: June 1, 2009
Assets: $91 billion
WorldCom was one of the largest telecommunications companies in the United States in the 1990s. Beginning in 1999 and, the company used fraudulent accounting methods to mask its declining earnings by painting a false picture of financial growth and profitability to prop up the price of WorldCom’s stock. When it entered bankruptcy, it was the largest company to ever file for Chapter 11.
Bankruptcy filing: July 21, 2002
Assets: $103.9 billion
#2: Washington Mutual
Washington Mutual was a savings bank holding company that controlled Washington Mutual Bank until its collapse in 2008. Washington Mutual Bank was seized by the Office of Thrift Supervision and placed into the receivership of the FDIC in September 2008 after withdraws of $16.4 billion during a 10-day bank run. FDIC sold the banking subsidiaries to JP Morgan Chase for $1.9 billion.
Bankruptcy filing: Sept. 26, 2008
Assets: $327.9 billion
#1: Lehman Brothers
Before declaring bankruptcy in 2008, Lehman Brothers was a global financial services firm doing business in banking, research and trading. It was the fourth largest investment bank in the United States. Lehman entered bankruptcy following the massive exodus of clients and devaluation of its assets by credit rating agencies. Many say the government’s willingness to let Lehman fail played a role in the recent financial crisis.
Bankruptcy filing: Sept.15, 2008
Assets: $691 billion