U.S. bankruptcy filings spiked in August after slowdown in July

By Ciara Linnane

Filings for the year through August are highest since 2020 and second-highest since 2010, S&P Global Market Intelligence says

U.S. bankruptcy filings spiked in August after a slowdown in July, propelling the total for the first eight months of the year to the highest level since 2020 and second-highest since 2010, S&P Global Market Intelligence said Monday.

There were 452 filings in the year through end August, which compares with 466 in the same period in 2020, when the pandemic was still in full swing, and 604 in the same period in 2010.

In August alone, the tally comes to 63, up from a revised 49 in July. That was the third-highest monthly total this year, behind 72 in June and 68 in April.

"U.S. companies continue to struggle with several issues this year, including high interest rates and geopolitical uncertainty," S&P said in a report.

However, the economy "has still proven its resiliency," with real GDP increasing at an annual rate of 3% in the second quarter from the first, according to the Bureau of Economic Analysis' most recent estimate, released Aug. 29.

Three of August's filers were companies with more than $1 billion in liabilities, namely solar technology provider SunPower Corp. (SPWRQ), perfumes and cosmetics wholesaler Avon International Operations Inc. and gas station and convenience store operator SQRL Service Stations LLC.

Of the three, SunPower was publicly listed, while Avon and SQRL are private.

On Aug. 29, a federal bankruptcy court approved a $45 million stalking horse bid for SunPower's Blue Raven Solar LLC installation business from Complete Solaria Inc. (CSLR), a Utah-based solar company.

The court further approved a stalking horse bidder for SunPower's remaining assets and set a Tuesday deadline for additional bids.

Other highlights of the S&P report include:

There have been 69 bankruptcy filings in the consumer discretionary space in 2024 so far. That's hardly surprising given the state of the consumer after a long period of high inflation. Retailers and fast-food restaurants have been hit hard as consumers seek value and cut back on non-essentials amid fears the economy is headed for a recession.

The consumer discretionary, industrial and healthcare sectors accounted for most of the filings in the year to date, or about 60%, according to S&P. That's followed by consumer staples, IT and financials.

On Monday, discount retailer Big Lots (BIG) became the latest company to file for Chapter 11 bankruptcy protection in a move aimed at facilitating its acquisition by Nexus Capital Management LP.

-Ciara Linnane

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09-10-24 1203ET

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