Business bankruptcies are rising rapidly. What’s even more worrisome: Many of the troubled companies are large.
Corporate behemoths including SVB Financial, Bed Bath & Beyond, and Yellow sought Chapter 11 bankruptcy protection this year. The filers blamed elevated inflation, higher interest rates, waning government aid, and lingering supply-chain disruptions. More corporate filings are likely on the way as high interest rates push big companies over the edge.
While any type of bankruptcy signals distress, large-business bankruptcies carry particularly significant economic risks. They can send a chill through financial markets, involve tens of thousands of job losses, or, in the case of Lehman Brothers in 2008, remove all doubt that an economic downturn is under way.
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