Billion-dollar US corporate bankruptcy filings plummet to 7-year low in 2021

The number of U.S. corporate bankruptcies with more than $1 billion in liabilities each fell to its lowest point in seven years in 2021, according to S&P Global Market Intelligence data.

The drop-off is part of a broader decrease in corporate filings in 2021 and followed bankruptcies hitting a 10-year high in 2020 as companies faced the early effects of the coronavirus pandemic. Since then, federal stimulus money and more flexibility from lenders have kept many struggling businesses out of court, experts have said.

Filings are likely to stay slow for at least the first half of 2022 as the same dynamics keep many businesses afloat.

Fewer bankruptcies

Fourteen companies reported more than $1 billion in liabilities in bankruptcy cases filed in 2021, according to Market Intelligence data. That is lower than every year since 2014.

There were 417 corporate bankruptcies in the U.S. in 2021, down from 641 in 2020. A total of 44 bankruptcy filings in 2020 listed corporate debtors with more than $1 billion in liabilities, more than each of the prior 10 years.

Smaller filings

The majority of filings in 2021, at 241, reported liabilities ranging between $1 million to $100 million, according to Market Intelligence data. The smallest bankruptcies, those claiming less than $1 million in liabilities, ticked up slightly in 2021 compared to the prior two years.

Troubled sectors

The 14 largest bankruptcies in 2021 included companies in the real estate, utilities, information technology, energy, and consumer discretionary sectors, according to Market Intelligence data.

These businesses were all hit hard during the pandemic as lockdowns were enforced and consumers' spending habits changed. The consumer discretionary sector, which includes companies that sell goods and services viewed as nonessential, was especially impacted during pandemic-related restrictions. The pandemic also changed the commercial real estate landscape as office employees began working from home.

Supply-chain issues continued to hammer all sectors as well, as businesses faced shortages and continued backlogs at U.S. ports.

Editor's note: Bankruptcy figures include public companies or private companies with public debt with a minimum of $2 million in assets or liabilities at the time of filing, in addition to private companies with at least $10 million in assets or liabilities. Market Intelligence may remove companies from this list if it discovers that their total assets and liabilities do not meet the threshold requirement for inclusion.