It is never fun filing for bankruptcy, but sometimes, it’s the only option you can think of. The following companies and individuals faced rough times and while some managed to walk out with dignity, the others were not as lucky.
1. Lehman Brothers
Lehman Brothers Holdings Inc. succumbed to the subprime mortgage crisis and became the biggest bankruptcy filing in history. The 158-year-old firm, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan on September 15, 2008. The collapse of Lehman, which Pre-Bankruptcy Assets were more than US $639-billion. Lehman was forced into bankruptcy after Barclays PLC and Bank of America Corp. abandoned takeover talks.
2. Washington Mutual
Washington Mutual (WaMu), was a savings bank holding company and the former owner of Washington Mutual Bank, which was the United States’ largest savings and loan association until it became the largest bank failure in U.S. history for the time. WaMu, the 119-year-old Seattle-based thrift, sought Chapter 11 protection in U.S. Bankruptcy Court on September 26, 2008 and according to court records WaMu listed more than 327.9 billion in assets in its bankruptcy filing.
WorldCom, founded in 1983 as LDDS Communications, the nation’s second-largest long-distance company and the largest handler of Internet data, filed for Chapter 11 bankruptcy protection on July 21, 2002. The WorldCom filing had been anticipated since the company disclosed in late June that it had improperly accounted for more than $3.8 billion of expenses. The WorldCom filing listed more than $107 billion in assets.
4. General Motors
GM’s bankruptcy filing is the forth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets. After the Chapter 11 filing, effective June 8, 2009, GM was removed from the Dow Jones Industrial Average and replaced by Cisco Systems.
5. CIT Group
Lender CIT Group filed for Chapter 11 bankruptcy protection Nov. 1, 2009 with listed $71 billion assets in its bankruptcy filing. Disruptions in the credit markets coupled with the global economic deterioration led to bankruptcy filling that also took other biggest financial institutions. The lender funded about 1 million businesses across US, Canada, Europe and Asia.
Enron was originally involved in transmitting and distributing electricity and natural gas throughout the United States. Enron Corp. filed for bankruptcy pursuant to Chapter 11 on December 2, 2001, with previously recorded assets of $63.4 billion. The Enron collapse caused significant losses to pension funds and shareholders. Because of Enron, accounting practices across the United States were called into question, and penalties and regulations were tightened for both banks and corporate legal businesses. Multiple international banks were sued for claims by creditors for allowing accounting fraud and all most were eventually settled.
Conseco based in the Indianapolis suburb of Carmel, the nation’s 26th-largest life insurance company and finance giant filed for Chapter 11 bankruptcy protection on December 17, 2002. The company collapsed under a huge debt load resulting from a rash of acquisitions. The filing by the company, with $52 billion in assets, led to the sale of its finance business.
Chrysler Group LLC, a U.S. based automobile manufacturer headquartered in the Detroit, Michigan filed a Chapter 11 petition on April 30, 2009 and announced a plan for a partnership with Italian automaker Fiat. After months of living on government loans, the nation’s third-largest car manufacturer finally succumbed to bankruptcy caused by higher fuel prices, the recession and customer that were moving away from the gas-guzzling SUVs that were once big money makers. Chrysler previously recorded assets of $39 billion.
9. Thornburg Mortgage
Thornburg Mortgage Inc., an American publicly traded corporation headquartered in Santa Fe, New Mexico. Founded in 1993, the company was focused on real estate investment, acquisition and managing mortgages, with an adjustable rate. During the recent Financial crisis the company experienced financial difficulties related to the ongoing subprime mortgages, and it filed for bankruptcy on April 1, 2009. The company listed $36.5 billion assets in its bankruptcy filing.
10. Pacific Gas and Electric
On April 6, 2001, Pacific Gas and Electric filed for Bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The company, a unit of PG&E Corp. provided natural gas and electric service to approximately 12 million people in Northern and Central California, or about one in every twenty Americans. Nether parent firm, nor any of its other units were included or are affected by the filing. Deregulation of electricity market and massive debt led to its bankruptcy protection. The company listed $36 billion assets in its bankruptcy filing.