In this article we are going to list the 5 biggest companies that went bankrupt. For a detailed coverage of this topic and a more comprehensive list please head on over to the 15 biggest companies that went bankrupt.
5. General Motors (NYSE:GM)
Total assets at the time of bankruptcy (in billions of dollars): 82.3
Date of bankruptcy: June 1, 2009
It may be going strong once again, but GM faced tough times in 2009, where it basically required a bailout worth nearly $40 billion from the US government, resulting in the entire reorganization of the company itself.
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4. Pacific Electric and Gas
The only company to make our list twice is Pacific Electric and Gas, which had to pay out billions to victims of wildfires in California. This added to losses of billions in 2019 and resulted in the company declaring bankruptcy though it has started to move out of the bankruptcy phase.
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3. Worldcom
Total assets at the time of bankruptcy (in billions of dollars): 103.9
Date of bankruptcy: July 21, 2002
In its heyday, Worldcom was the second biggest telecom company in the US, after AT&T (NYSE:T). However, it was embroiled in a major accounting scandal in 2002, where fraudulent methods were used to hide the loss of earnings of the company. The subsequent furor and attention surrounding the company saw the company declare bankruptcy.
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2. Washington Mutual
Total assets at the time of bankruptcy (in billions of dollars): 327.9
Date of bankruptcy: September 26, 2008
Washington Mutual was a savings bank holding company, and was also the owner of the biggest savings and loan association in the entire United States. Just like our number one entry, the company’s downfall came as a result of its involvement in the subprime mortgage crisis, which led to a major loss in value of the stock of the company, as well as the termination of thousands of employees. When customers lost confidence in the bank, they withdrew nearly $17 billion in cash, which led to the Federal Deposit Insurance Corporation to come in, seize assets of the company and eventually, sold it to JP Morgan Chase (NYSE:JPM).
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1. Lehman Brothers
Total assets at the time of bankruptcy (in billions of dollars): 691.1
Date of bankruptcy: September 15, 2008
With more than twice the assets of Washington Mutual, Lehman Brothers easily tops the list of the 15 biggest companies that went bankrupt. Lehman Brothers was the most high profile casualty of the 2008 financial crisis. It was the fourth biggest investment bank in the United States at the time of its demise, and had been in existence for 158 years before finally filing for bankruptcy. It also had 25,000 employees, who were suddenly terminated and videos of the employees arriving at the office to clean out their desks were quite famous, as the enormity of the situation was felt by everyone.
The reason behind the bankruptcy was simple, if multi-fold; Lehman’s involvement in the sub-prime mortgage crisis (which was the bases for the 2008 recession), downgrading of assets by credit rating agencies, loss of confidence and major loss of value of stock. Due to these reasons, the company lost out on most of its clients, who moved to different banks and hence, had no choice but to declare bankruptcy. Even now, 12 years later, it is easily one of the most famous bankruptcies in the world, and definitely the biggest. Its North American assets were later purchased by Barclays (NYSE:BCS).
See also: 6 Easiest Good Credit Cards To Get Approved For After Bankruptcy and 11 largest municipal bankruptcies in US history
