George S. May Business Blog

2009 on track to see the most Chapter 11 filings over one year

If – well, more like when – General Motors Inc. files for bankruptcy protection on June 1^st, they will become the 99^th public company this year to do so. This, according to BankruptcyData.com puts us on track for the worst year, in terms of Chapter 11 filings, ever. The company has roughly $91 billion in assets and 243,000 employees, according to its end of year filings with the Securities and Exchange Commission and will be, by far, the biggest bankruptcy this year. Up there with GM, Thornburg Mortgage, mall giant General Growth Properties and Lyondell Chemical Company are a few other massive companies that have filed for bankruptcy since January.

“At the current pace of filings, we will come very close to the record number of public company bankruptcies,” said George Putnam III, founder of New Generation Research, which tracks distressed securities and bankruptcies. The record is 263 filings in 2001.

2009 does not hold the record for largest bankruptcy filings, however. That distinction goes to 2008, which saw banking giants Lehman Brothers Holdings and Washington Mutual file. When Lehman went under, it had about $691.1 Billion in assets, making it the biggest company to declare bankruptcy in history. Washington Mutual, now owned by JPMorgan Chase (JPM), comes in at number two with about $327.9 Billion in assets at the time of its filing. WorldCom, the long distance company which filed for bankruptcy protection in 2002, is the third largest with $103.9 Billion in assets. General Motors, when it files, will likely come in fourth with just over $91 Billion in assets.

GM will be, however, one of the top companies in terms of employees (243,000) to declare bankruptcy. Kmart Corporation, who is now part of Sears Holdings, which filed for bankruptcy protection in 2002, had about 10,000 more employees.

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