| U.S. corporate bankruptcies hit 14-year high |
U.S. corporate bankruptcies have surged to their highest levels since the aftermath of the global financial crisis, according to S&P Global Market Intelligence, as persistently high interest rates and weakened consumer demand place severe pressure on struggling businesses. At least 686 companies filed for bankruptcy in 2024, an 8% increase from the previous year and the highest number since 2010. Out-of-court restructuring efforts aimed at avoiding insolvency have also risen, outpacing formal bankruptcies two-to-one, Fitch Ratings reported. These liability management exercises often delay rather than solve underlying operational challenges, leaving many companies still vulnerable to bankruptcy. Liability management exercises, a growing trend, have become a key strategy for struggling companies to delay insolvency. However, these maneuvers often increase a company’s debt load, compounding financial risk. “Maybe their profitability will go up, or interest rates will go down, or a combination of both of those, really in order to stave off bankruptcy,” said Joshua Clark, a Senior Director at Fitch Ratings. He added that such exercises could negatively impact lenders by stacking more debt atop existing liabilities.
