As of May 3, 2023, the United States has seen several large and complex bankruptcy cases filed over the years. These cases have had far-reaching effects on the economy and the financial markets. Here are the top 10 largest asset bankruptcy cases ever filed in the United States, in order from 1 to 10, and a detailed synopsis of each case.
- Lehman Brothers Holdings Inc. - $691 billion (2008): The collapse of Lehman Brothers, a global financial services firm, in September 2008 was a key factor in the financial crisis of 2008 and had a significant impact on the U.S. economy and financial markets. Lehman Brothers filed for Chapter 11 bankruptcy with over $691 billion in assets, making it the largest bankruptcy case in U.S. history. The bankruptcy led to significant losses for investors and creditors and had a ripple effect throughout the global financial system.
- WorldCom Inc. - $103.9 billion (2002): WorldCom, a telecommunications company, filed for Chapter 11 bankruptcy in July 2002 with over $103.9 billion in assets. The bankruptcy was caused by a massive accounting fraud that inflated the company's earnings. The scandal led to the resignation and criminal charges against CEO Bernard Ebbers and CFO Scott Sullivan. WorldCom emerged from bankruptcy in 2004 as MCI.
- General Motors Corp. - $91 billion (2009): In June 2009, General Motors (GM) filed for Chapter 11 bankruptcy due to declining sales and a significant debt load. The U.S. government provided financial assistance to the company to help it restructure and emerge from bankruptcy. GM emerged from bankruptcy in July 2009 after selling off some of its assets and restructuring its operations.
- CIT Group Inc. - $80.4 billion (2009): CIT Group, a commercial lender, filed for Chapter 11 bankruptcy in November 2009 with over $80.4 billion in assets. The bankruptcy was caused by a significant debt load and a lack of access to capital markets. CIT Group emerged from bankruptcy in 2010 after restructuring its operations and financial obligations.
- Enron Corp. - $65.5 billion (2001): Enron, an energy company, filed for Chapter 11 bankruptcy in December 2001 with over $65.5 billion in assets. The bankruptcy was caused by a massive accounting fraud that inflated the company's earnings. The scandal led to criminal charges against several executives, including CEO Jeffrey Skilling and Chairman Ken Lay. The bankruptcy led to significant losses for investors and creditors and had a significant impact on the energy markets.
- Washington Mutual Inc. - $32.9 billion (2008): Washington Mutual, a savings and loan bank, filed for Chapter 11 bankruptcy in September 2008 with over $32.9 billion in assets. The bankruptcy was caused by losses related to the subprime mortgage market and a lack of access to capital markets. The bank's failure led to significant losses for investors and depositors.
- Conseco Inc. - $61.4 billion (2002): Conseco, an insurance and finance company, filed for Chapter 11 bankruptcy in December 2002 with over $61.4 billion in assets. The bankruptcy was caused by a significant debt load and losses related to its acquisition of Green Tree Financial. Conseco emerged from bankruptcy in 2003 after restructuring its operations and financial obligations.
- MF Global Holdings Ltd. - $41 billion (2011): MF Global, a financial services firm, filed for Chapter 11 bankruptcy in October 2011 with over $41 billion in assets. The bankruptcy was caused by a significant debt load and losses related to its investment in European sovereign debt. The bankruptcy of MF Global had significant consequences for the financial markets, as it was the first time that customer funds were found to be missing from a U.S. futures broker-dealer. The missing funds led to a significant loss of confidence in the futures markets and sparked regulatory reforms.
- Energy Future Holdings Corp. - $49.7 billion (2014): Energy Future Holdings, a Texas-based energy company, filed for Chapter 11 bankruptcy in April 2014 with over $49.7 billion in assets. The bankruptcy was caused by a significant debt load and declining demand for electricity in Texas. Energy Future Holdings emerged from bankruptcy in 2016 after restructuring its operations and financial obligations.
- General Growth Properties Inc. - $29.6 billion (2009): General Growth Properties, a real estate investment trust, filed for Chapter 11 bankruptcy in April 2009 with over $29.6 billion in assets. The bankruptcy was caused by a significant debt load and declining property values during the financial crisis. General Growth Properties emerged from bankruptcy in 2010 after restructuring its operations and financial obligations.
These top 10 largest asset bankruptcy cases ever filed in the United States highlight the complex and far-reaching consequences of financial distress on companies and the economy. They serve as a reminder of the importance of effective corporate governance, risk management, and financial regulation to prevent similar crises in the future.