Markets
The 20 Biggest Bankruptcies in U.S. History
Doing business means taking calculated risks.
Regardless of whether you are opening a lemonade stand or you’re a leading executive at a Fortune 500 company, risk is an inevitable part of the game.
Taking bigger risks can generate proportional rewards – and sometimes, such as for the companies you’ll read about below, the risk-taking backfired to queue up some of the biggest bankruptcies in U.S. history.
Going For Broke
Today’s infographic comes to us from TitleMax, and it highlights the 20 biggest bankruptcies in the country’s history.
Companies below are sorted by total assets at the time of bankruptcy.
There are times when companies are forced to push in all of their chips to make a game-changing bet. Sometimes this pans out, and sometimes the plan fails miserably.
In other situations, companies were actually unaware they were “all-in”. Instead, the potentially destructive nature of the risk was not even on the radar, only to be later triggered through a global crisis or unanticipated “Black Swan” events.
The Biggest Bankruptcies in the U.S.
Here are the 20 biggest bankruptcies in U.S. history, and what triggered them:
| Rank | Company | Year | Assets at Bankruptcy | Downfall |
|---|---|---|---|---|
| #1 | Lehman Brothers | 2008 | $691 billion | 2008 financial crisis |
| #2 | Washington Mutual | 2008 | $328 billion | 2008 financial crisis |
| #3 | Worldcom Inc. | 2002 | $104 billion | Accounting scandal |
| #4 | GM | 2009 | $82 billion | Massive debt |
| #5 | CIT Group | 2009 | $71 billion | Credit crunch |
| #6 | Pacific Gas & Electric | 2019 | $71 billion | Wildfires |
| #7 | Enron | 2001 | $66 billion | Fraud |
| #8 | Conseco | 2002 | $61 billion | Failed acquisition strategy |
| #9 | MF Global | 2011 | $41 billion | European sovereign bonds |
| #10 | Chrysler | 2009 | $39 billion | Massive debt |
| #11 | Thornburg Mortgage | 2009 | $37 billion | Declining mortgage values |
| #12 | Pacific Gas & Electric | 2001 | $36 billion | Drought |
| #13 | Texaco | 1987 | $35 billion | Contract dispute |
| #14 | FCOA | 1988 | $34 billion | Savings and loan crisis |
| #15 | Refco | 2005 | $33 billion | Accounting fraud |
| #16 | IndyMac Bancorp | 2008 | $33 billion | Mortgage market collapse |
| #17 | Global Crossing | 2002 | $30 billion | Plummeting world economy |
| #18 | Bank of New England | 1991 | $30 billion | Bad loans |
| #19 | General Growth Properties | 2009 | $30 billion | Failed acquisition strategy |
| #20 | Lyondell Chemical | 2009 | $27 billion | Decline in demand |
The data set on the biggest bankruptcies is organized by assets at time of bankruptcy. Therefore, they are not in inflation-adjusted terms, meaning the list skews towards more recent events.
This makes the impact of the 2008 financial crisis particularly easy to spot.
The events and consequences relating to the crisis (loan defaults, illiquidity, and declining asset values) were enough to take down banks like Lehman Brothers and WaMu. The after effects – including a slumping global economy – led to a second wave of bankruptcies for companies such as GM and Chrysler.
In total, nine of the 20 biggest bankruptcies on the list occurred in the 2008-2009 span.
A Dubious Distinction
You may also notice that one company was on the list twice, and this was not an accident.
Pacific Gas & Electric, a California company that is the nation’s largest utility provider, has the dubious distinction of going bankrupt twice in the last 20 years. The first time, in 2001, resulted from a drought that limited hydro electricity generation, forcing the company to import electricity from outside sources at exorbitant prices.
The more recent instance happened earlier this year. Facing tens of billions of dollars in liabilities from raging wildfires in California, the utility filed for Chapter 11 protection yet another time.
Markets
How the Top Cryptocurrencies Performed in 2021
Cryptocurrencies had a breakout year in 2021, providing plenty of volatility and strong returns across crypto’s various sectors.
Energy
The Periodic Table of Commodity Returns (2012-2021)
Energy fuels led the way as commodity prices surged in 2021, with only precious metals providing negative returns.
The Periodic Table of Commodity Returns (2022 Edition)
For investors, 2021 was a year in which nearly every asset class finished in the green, with commodities providing some of the best returns.
The S&P Goldman Sachs Commodity Index (GSCI) was the third best-performing asset class in 2021, returning 37.1% and beating out real estate and all major equity indices.
This graphic from U.S. Global Investors tracks individual commodity returns over the past decade, ranking them based on their individual performance each year.
Commodity Prices Surge in 2021
After a strong performance from commodities (metals especially) in the year prior, 2021 was all about energy commodities.
The top three performers for 2021 were energy fuels, with coal providing the single best annual return of any commodity over the past 10 years at 160.6%. According to U.S. Global Investors, coal was also the least volatile commodity of 2021, meaning investors had a smooth ride as the fossil fuel surged in price.
| Commodity | 2021 Returns |
|---|---|
| Coal | 160.61% |
| Crude Oil | 55.01% |
| Gas | 46.91% |
| Aluminum | 42.18% |
| Zinc | 31.53% |
| Nickel | 26.14% |
| Copper | 25.70% |
| Corn | 22.57% |
| Wheat | 20.34% |
| Lead | 18.32% |
| Gold | -3.64% |
| Platinum | -9.64% |
| Silver | -11.72% |
| Palladium | -22.21% |
Source: U.S. Global Investors
The only commodities in the red this year were precious metals, which failed to stay positive despite rising inflation across goods and asset prices. Gold and silver had returns of -3.6% and -11.7% respectively, with platinum returning -9.6% and palladium, the worst performing commodity of 2021, at -22.2%.
Aside from the precious metals, every other commodity managed double-digit positive returns, with four commodities (crude oil, coal, aluminum, and wheat) having their best single-year performances of the past decade.
Energy Commodities Outperform as the World Reopens
The partial resumption of travel and the reopening of businesses in 2021 were both powerful catalysts that fueled the price rise of energy commodities.
After crude oil’s dip into negative prices in April 2020, black gold had a strong comeback in 2021 as it returned 55.01% while being the most volatile commodity of the year.
Natural gas prices also rose significantly (46.91%), with the UK and Europe’s natural gas prices rising even more as supply constraints came up against the winter demand surge.
Despite being the second worst performer of 2020 with the clean energy transition on the horizon, coal was 2021’s best commodity.
High electricity demand saw coal return in style, especially in China which accounts for one-third of global coal consumption.
Base Metals Beat out Precious Metals
2021 was a tale of two metals, as precious metals and base metals had opposing returns.
Copper, nickel, zinc, aluminum, and lead, all essential for the clean energy transition, kept up last year’s positive returns as the EV batteries and renewable energy technologies caught investors’ attention.
Demand for these energy metals looks set to continue in 2022, with Tesla having already signed a $1.5 billion deal for 75,000 tonnes of nickel with Talon Metals.
On the other end of the spectrum, precious metals simply sunk like a rock last year.
Investors turned to equities, real estate, and even cryptocurrencies to preserve and grow their investments, rather than the traditionally favorable gold (-3.64%) and silver (-11.72%). Platinum and palladium also lagged behind other commodities, only returning -9.64% and -22.21% respectively.
Grains Bring Steady Gains
In a year of over and underperformers, grains kept up their steady track record and notched their fifth year in a row of positive returns.
Both corn and wheat provided double-digit returns, with corn reaching eight-year highs and wheat reaching prices not seen in over nine years. Overall, these two grains followed 2021’s trend of increasing food prices, as the UN Food and Agriculture Organization’s food price index reached a 10-year high, rising by 17.8% over the course of the year.
As inflation across commodities, assets, and consumer goods surged in 2021, investors will now be keeping a sharp eye for a pullback in 2022. We’ll have to wait and see whether or not the Fed’s plans to increase rates and taper asset purchases will manage to provide price stability in commodities.
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