Top 10 Biggest Bankruptcies In American History |

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A Chapter 11 bankruptcy can mean the end of a business. While many firms file Chapter 11 and manage to emerge and continue to operate, some close their doors for good. The top ten largest bankruptcies in American history shocked the nation and in some cases, damaged the public?s faith in business.

The largest bankruptcy was the 2008 filing by investment giant Lehman Brothers. At the time of filing, Lehman Brothers had a value of $691 billion. The firm?s collapse was a result of the real estate and investment market crash.

Lehman Brothers HQ on Bankruptcy Day:

With a value of $327.9 billion at the time of its 2008 filing, banking giant Washington Mutual comes in at number two. Washington Mutual was affected by the collapse of Lehman Brothers, with customers withdrawing an estimated $16.7 billion dollars from the bank in just over ten days. Washington Mutual was later acquired by JP Morgan, but investors lost millions. Many employees lost their retirement savings, as their money was tied to Washington Mutual stock.

Worldcom, with a value of $103.9 billion dollars at the time of its 2002 bankruptcy, was marred by accounting and investment scandals. Worldcom?s CEO, Bernie Ebbers, served jail time for his involvement in the company?s collapse.

General Motors, which filed in 2009, had a value of $91 billion at the time. The auto giant had declining sales for years and could not weather the financial collapse of 2008.

The banking conglomerate known as CIT Group filed bankruptcy in 2009, reporting a value of $80.4 billion. A poorly-timed expansion, coupled with the poor economic conditions at the time, pushed the giant into bankruptcy.

Enron, an energy company, filed in 2001 and had a value of $65.5 billion. Enron was a scandalous collapse, marred by fraudulent accounting reports. Investors lost millions of dollars in Enron due to the false profit statements made by the company prior to bankruptcy.

Enron:

Conseco, an insurer and financial firm, filed for Chapter 11 in 2002. At the time, Conseco had a value of $61.4 billion. The company acquired many companies during the 1990s that later failed, which damaged the main business.

In 2011, brokerage firm MF Global filed for bankruptcy with a reported value of $41 billion. The evolving European debt crises severely impacted MF Global?s operations.

Chrysler, with a value of $39.3 billion at the time of its 2009 filing, was ordered to file by President Barack Obama. The financial crisis was quickly spreading to the already-weakened auto market and threatening the entire industry. Bankruptcy allowed the government to overhaul Chrysler and avoid the loss of the main American auto companies.

Thornburg Mortgage comes in last on the list, filing for bankruptcy in 2009 with 36.5 billion dollars in assets. While Thronburg Mortgage was not a subprime lender, actually specializing in mortgages to borrowers with good credit, the credit crunch that followed the financial crisis doomed the lender.

Citations:

This article was written by Edwin Miles, a business journalist & financial expert with over a decade of experience working for companies such as www.carfinance247.co.uk

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Source: http://www.howimportantisyourfinance.com/2012/09/03/top-10-biggest-bankruptcies-in-american-history/?utm_source=rss&utm_medium=rss&utm_campaign=top-10-biggest-bankruptcies-in-american-history

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