Numerous American companies struggled to stay afloat throughout the COVID-19 pandemic, which reshaped daily life and rendered some types of businesses unable to function. Economists at the Federal Reserve estimated that 200,000 more businesses closed in 2020 as compared to previous years.
People who run smaller companies generally decide to simply close up shop if their business flounders. But major corporations often choose to file for Chapter 11 bankruptcy protection to reorganize their finances — an option that can be prohibitively expensive for many organizations. Many of America’s largest and most well-known brands filed for bankruptcy largely due to the pandemic.
24/7 Wall St. reviewed court filings, media reports, and industry analysis in order to compile a list of major American brands that went bankrupt during coronavirus.
Many of the brands that declared bankruptcy operate in one of several sectors, as social distancing restrictions and public health measures disproportionately affected certain types of businesses. For instance, live events were virtually all canceled, and brick-and-mortar retailers lost a huge share of their business as foot traffic declined.
The economic impact was felt differently across the country. States with thriving tech sectors largely avoided the worst economic fallout of the pandemic, while states that relied heavily on energy and resource extraction faced more severe effects. These are the state economies hit hardest by COVID-19.
For most of the companies that went bankrupt during the pandemic, COVID-19 wasn’t fully to blame. Many had already had debt burdens in the hundreds of millions or even billions of dollars due to leveraged buyouts from private equity firms or mismanagement from executives. These are the worst-run companies of 2020.