Historical Bankruptcy Filings

Wed, Jun 11, 2014

Bankruptcy

Some rights reserved by Tax CreditsThe 11th largest bankruptcy in history is happening with the Chapter 11 filing of Energy Future Holdings of Texas, according to the New York Times. This made us think, what are some of the other big bankruptcy filings in U.S. History?

The 2008 filing of Lehman Brothers is one of the, if not the, largest bankruptcies in United States history. Others of note include Enron, Chrysler, General Motors, and Washington Mutual.

Lehman Brothers went bankrupt for many reasons, but large amounts of borrowing and their specific investing specialties made it especially vulnerable. They were such a large company that their bankruptcy affected numerous people throughout the United States. It occurred in 2008, right along with the economy slump that affected the financial stability of many—The Great Recession. Investors were scared off because of the bankruptcy and many lost their shirts, so they couldn’t even invest for a long time. Lehman Brothers’ bankruptcy started the fall of many other companies too. It was like dominoes sometimes. Job after job was lost and mortgage after mortgage couldn’t be paid. All these mortgages were inter-connected with investing companies too—so a big mess ensued and out housing crisis began. Many companies and individuals were forced into bankruptcy because they couldn’t pay their debts as a direct or indirect result of this financial event. It is amazing to some that the economy could be so interconnected, almost as if nothing was learned by the Depression.

Enron is another big name you have probably heard of. Enron was an employer of thousands of people in the United States. According to Wikipedia, Enron has since become a well-known example of willful corporate fraud and corruption.” This is because their accounting practices have been greatly scrutinized and the effects have been so wide reaching. They also saw many top executives do prison time because of their part in the scandal. The Enron scandal is especially well known in our area because its connection to Arthur Andersen—who had an office here in Sarasota. If you’ve been around a while, you’ll remember that Arthur Andersen Parkway used to intersect with Fruitville Rd. Read more about that name change here, in the Sarasota Herald-Tribune. Enron

Chrysler and General Motors are well known because they are household names (of course) and because these bankruptcies affected many workers in the United States. In addition, the General Motors bankruptcy was in the news because of the federal bailout associated with it. General Motors was “saved” with help of the federal government and restructured into “new” GM. This saved many jobs, but also came at a price to taxpayers according to Time.com.

Chrysler has seemingly rebounded from its 2009 bankruptcy, which was also aided by the United States government. This Forbes article tells more about this American car company’s revitalization.

Washington Mutual was a large bank. It went bankrupt around the time of Lehman Brothers.  This article in Forbes tells more about why the Washington Mutual bankruptcy matters so much in U.S history.

As you can see, bankruptcy can make or break a company apparently a country in some cases! Every bankruptcy is different, even your own. Attorneys are essential in helping you navigate one.

Attorney Christopher D. Smith is a Lakewood Ranch, Florida attorney with SmithLaw Attorneys. He concentrates in bankruptcy, civil litigation, probate, estate planning, and elder exploitation cases in the Sarasota and Bradenton area. Call 941-907-4774 to learn more and to ask about our free consultations.

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