Cities, municipalities, and even large corporations file bankruptcy in addition to individuals, couples, and local businesses. While individual, couple, and local business bankruptcy filings hit closer to home, they very rarely make the news or become of national importance, like those of larger national or international corporations do. The reasons behind large company bankruptcy filings are vast but most can be laid at the door of an economic downturn while others, riding high on the crest of an ever-growing bubble bound to burst at any moment, can be faulted for “creative bookkeeping.” Here, we provide a list of five corporations in order of lowest to highest declared assets that have filed bankruptcy in the last 20 years.
#5: CIT Group, Inc
CIT Group (FKA Commercial Investment Trust) provided commercial financing, lending, leasing and advisory services to more than 30 industries since its founding in 1908. Recently CIT became a bank holding company and, from 2004 to 2007, qualified for and received $2.3 billion in TARP (Troubled Asset Relief Program) federal funds. CIT filed for relief under Chapter 11 of the Bankruptcy Code on November 1, 2009 with $80.4 billion in declared assets. It emerged from bankruptcy 38 days later on Dec. 10, 2009.
#4: General Motors
Just as Chrysler had faced financial difficulties, General Motors Company was forced into bankruptcy in 2009 as a result of the lagging economy. GM filed for relief under Chapter 11 of the Bankruptcy Code on June 1, 2009 with declared assets of $91 billion and emerged from bankruptcy just over a month later. It was financed in part by the U.S. government which still owns a 27% stake in the company.
As one of the largest telecommunications companies in the U.S. during the 1990s, WorldCom propped up its stock using “creative accounting” methods, providing a false appearance of growth and profitability. It filed bankruptcy on July 21, 2002 with declared assets of $103.9 billion. At the time, it was the largest company to ever file for Chapter 11.
#2: Washington Mutual
Washington Mutual, a savings bank holding company, experienced financial collapse when a 10 day period of bank runs in 2008 resulted in withdrawals of $16.4 billion. Washington Mutual Bank, under Washington Mutual’s control, was seized and placed into the receivership of the FDIC. The company filed for relief under the Bankruptcy Code on September 26, 2008 with declared assets of $327.9 billion.
#1: Lehman Brothers
The fourth largest investment bank in the U.S., Lehman Brothers experienced a devaluation of its assets which, in turn, resulted in a huge loss of clients. Having done business globally in banking, research, and trading, Lehman Brothers filed for bankruptcy relief on September 15, 2008 with declared assets of $691 billion.
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