Northern California natural gas and electricity provider PG&E Corp. (NYSE: PCG) recently announced its intention to file for bankruptcy protection under Chapter 11 of the U.S. bankruptcy code. If that happens — as seems inevitable — the value of the filing may approach the size of the utility company’s 2001 bankruptcy on some $36 billion in assets.
U.S. bankruptcy protection comes in two primary flavors: Chapter 11, which protects the firm’s assets while it reorganizes its business and negotiates with its creditors, and Chapter 7, which liquidates the firm’s assets to pay its creditors.
A single recent example illustrates the difference. Toy retailer Toys “R” Us initially filed for Chapter 11 protection in September 2017 and secured $3 billion in what is known as debtor-in-possession financing to keep the company operating through the coming holiday season. In March of 2018, when it became clear to creditors that the holiday season was a disaster, they forced the toy store to liquidate and the last store closed in mid-May. The company ended up paying about $180 million to suppliers who were owed some $800 million, less than 25 cents on the dollar.
And while the Toys “R” Us bankruptcy was one of the largest ever retail bankruptcies, it isn’t even in the running for a top 10 or even top 50 listing. The really big numbers are reserved for failed banks and automakers that were buried in the financial crisis of 2008. Six of the 11 largest U.S. bankruptcies of all time were directly related to the financial crisis.
Here’s a list of the 11 largest U.S. bankruptcies of all time. We’ve included the date of the bankruptcy file, the type of filing and the value of the company’s assets at the time of bankruptcy filing, along with a brief description of how it all went down.