11 Largest Bankruptcies of All Time

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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.

Source: BrokenSphere / Wikimedia Commons

11. PG&E
> Date of filing: April 6, 2001
> Type of filing: Chapter 11
> Asset value: $36.15 billion

PG&E Corp. (NYSE: PCG) is the name of both a holding company and the utility owned by that company the supplies electricity and natural gas to northern California homes and businesses. The company was pummeled by rising costs of electricity in the summer of 2001, caused in part by price manipulation in the market. The state bailed the company out but it cost Governor Gray Davis his job and led to Arnold Schwarzenegger’s election to the post.

Source: Public Domain / Wikimedia Commons

10. Thornburg Mortgage
> Date of filing: May 1, 2009
> Type of filing: Chapter 11
> Asset value: $36.52 billion

Thornburg Mortgage was an early victim of the collapse in housing prices. It was forced to restate its fiscal 2007 results and in 2008 could not raise enough cash to meet margin calls totaling some $610 million. Thornburg never recovered after several creditors demand payments totaling nearly $950 million in March of 2008.

Source: tomeng / Getty Images

9. Chrysler
> Date of filing: April 30, 2009
> Type of filing: Chapter 11
> Asset value: $39.94 billion

The U.S. government took over ownership of Chrysler and GM in March 2009 in exchange for bailout funds to keep the two automakers open following the debacle known as the financial crisis. The feds eventually forced Chrysler to accept a merger offer from Italy’s Fiat. In all, Chrysler received $12.5 billion in federal bailouts and repaid $11.2 billion of it.

Source: GCapture / iStock

8. MF Global
> Date of filing: October 31, 2011
> Type of filing: Chapter 11
> Asset value: $40.54 billion

MF Global Holdings was the global commodities trader run by former New Jersey Governor and U.S. Senator Jon Corzine. The firm got tangled up in currency trades that spooked its customers, leading to withdrawals and a cash shortage due to over-exposure to “repo” transactions, sales of securities at a given price with an agreement to buy them back at a later date for a higher price.