Large-scale corporate bankruptcies are at their highest level since 2020 as elevated interest rates continue to batter businesses. 

This year giants such as Bed Bath and Beyond, trucking firm Yellow and wedding retailer David’s Bridal have filed for Chapter 11 bankruptcy thanks to a perfect storm of rampant inflation, high rates and supply-chain disruptions.

Some 459 corporate firms have filed so far this year, already surpassing the 373 in 2022 and 408 in 2021, according to S&P Global figures cited by Insider.

What’s more, so-called ‘mega bankruptcies’ – those by companies with more than $1 billion in assets – hit 16 in the first half of the year. 

By comparison, figures from consulting firm Cornerstone Research show there have been an average of 11 ‘mega bankruptcies’ in the first six months of every year between 2005 and 2022.

Some 459 corporate firms have filed so far this year, already surpassing the 373 in 2022 and 408 in 2021, according to S&P Global figures cited by Insider

Some 459 corporate firms have filed so far this year, already surpassing the 373 in 2022 and 408 in 2021, according to S&P Global figures cited by Insider

Some 459 corporate firms have filed so far this year, already surpassing the 373 in 2022 and 408 in 2021, according to S&P Global figures cited by Insider

Analysts at Cornerstone added the biggest corporate bankruptcy this year was SVB Financial Group, the parent company of Silicon Valley Bank, which had $175.4 billion in customer deposits at the time of its filing. 

Economists warn the rise in large-scale collapses can have devastating consequences on the economy. 

For example, the demise of trucking firm Yellow – which reportedly had $2.15 billion in assets at its time of filing – reverberated through domestic shipping and real estate markets to Wall Street. 

The rise in bankruptcies coupled with a weakening stock market and surge in credit card delinquencies has sparked fears the US is heading for a recession. 

But Steven Blitz, chief US economist at GlobalData TS Lombard, insisted any downturn would be less severe than the 2007-09 recession.

He told the Wall Street Journal: ‘You’re not going to see the kind of bankruptcies and balance-sheet stress that you saw during that period.’

He added that the economy was not ‘heading into some doom-death loop.’

What's more, so-called 'mega bankruptcies' - those by companies with more than $1 billion in assets - hit 16 in the first half of the year. Bed Bath and Beyond was reported to have assets of $4.4 billion when it filed for bankruptcy in April

What's more, so-called 'mega bankruptcies' - those by companies with more than $1 billion in assets - hit 16 in the first half of the year. Bed Bath and Beyond was reported to have assets of $4.4 billion when it filed for bankruptcy in April

What’s more, so-called ‘mega bankruptcies’ – those by companies with more than $1 billion in assets – hit 16 in the first half of the year. Bed Bath and Beyond was reported to have assets of $4.4 billion when it filed for bankruptcy in April

Figures from the US labor department showed employers added 336,000 jobs in September. The rate of unemployment also stayed at 3.8 percent last month.

And consumer spending has remained strong, having increased by 0.4 percent in August – the latest figures available.

Despite this, businesses have struggled to keep up with higher interest rates. Many accrued debt when rates were extremely low – making them vulnerable to any hikes.

The Fed’s funds rate is currently between 5.25 and 5.5 percent – up from 0.5 percent in April 2020 – after it decided to hold it steady during last month’s meeting. Economists predict another increase will happen before the end of the year.

Amy Quackenboss, an executive director at the American Bankruptcy Institute, told the WSJ: ‘Companies have been surviving the past few years by taking advantage of the ultralow interest rates.

‘But many of these corporations are seeing those loans come due now, and they’re struggling to refinance because the interest rates now are significantly higher.’

Aircraft leasing company Voyager Aviation Holdings is among those to attribute its bankruptcy – filed this summer – to higher interest rates.

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