Total US corporate bankruptcies fell in October, but more companies with large liabilities buckled under the weight of higher interest rates.
A total of 50 companies filed for bankruptcy in October, down from 61 in September, according to the latest S&P Global Market Intelligence data. This was the second-lowest monthly total for the year so far, though still elevated compared to monthly filing totals for most of 2021 and 2022.
Growing economic headwinds and a tight domestic labor market are putting more pressure on struggling companies. In the first 10 months of the year, 561 companies sought bankruptcy protection, more than any year since 2010, except for 2020.
Rite Aid Corp. filed for bankruptcy on Oct. 15, with plans to reduce its store footprint, sell its pharmacy benefits and services company Elixir Rx Solutions LLC and resolve outstanding litigation claims. Rite Aid has already received a commitment of $3.45 billion in additional financing from some of its lenders to ensure liquidity through the restructuring process.
Air Methods Corp., which provides air medical emergency transport services across 47 states, sought bankruptcy protection on Oct. 24. The company expects the process to reduce its total debt by approximately $1.7 billion.
Four companies with over $1 billion in liabilities — MVK FarmCo LLC, Rite Aid, Akumin Inc. and Air Methods — sought bankruptcy protection in October, more than any other month this year and up from just one such filing in September.
Though consumer spending remains remarkably robust, not all companies have benefited equally. Consumer discretionary and consumer staples were among the hardest hit sectors in October, with seven and five bankruptcy filings, respectively.
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The healthcare sector recorded an additional seven bankruptcies in October.
Just four states accounted for over half of the month's filings. California added 10 bankruptcies in October, bringing the state's total to 1,210 since 2010, while bankruptcies in Texas rose by six to 984.
New York recorded six additional bankruptcies in October, while Florida recorded five. Most other states' total filings remained unchanged over the month.
This Data Dispatch is updated on a regular basis. The last edition was published Oct. 10.
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. S&P Global 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.