By Ciara Linnane
Companies are struggling with high interest rates and a tight labor market
There have been more U.S. corporate bankruptcies so far in 2023 than in all of 2022 or 2021, as companies continue to struggle with high interest rates and a tight labor market.
S&P Global Market Intelligence has recorded 459 filings as of Aug. 31, which compares with 373 for all of 2022 and 408 for all of 2021. That’s still well below the 639 recorded in 2020, when the pandemic forced many companies into Chapter 11.
In August 2023 alone, some 57 companies filed for bankruptcy, among them Proterra Inc. (PTRAQ), the Burlingame, Calif.-based maker of electric buses and trucks.
The company is a big supplier of buses to transit systems across the nation, as the Associated Press reported President Joe Biden visited the company’s factory in South Carolina in 2021 to highlight U.S. electric-vehicle makers.
The company said it’s taking action to separate its business units “to maximize their independent potential.” It sells heavy trucks, vans, buses and off-highway equipment in the U.S., European and Asia-Pacific markets.
Trucking company Yellow Corp. (YELLQ) was another prominent name to go under in August, and put a $700 million federal loan the company received during the COVID-19 pandemic into the spotlight.
The Nashville, Tenn.,-based company blamed its demise on the International Brotherhood of Teamsters union, which in turn accused it of squandering its bailout funds.
Related: Yellow blames bankruptcy filing on ‘bullying’ by Teamsters
By sector, healthcare has seen the most bankruptcies for August, but lags consumer-discretionary and industrials in the year to date. Many of the healthcare bankruptcies were hospitals.
The consumer-discretionary sector has seen 57 filings through end-August, while the industrial sector has seen 54 filings.
One of the bigger bankruptcies was that of Bed Bath & Beyond, which filed for Chapter 11 in April.
See more: Bed Bath & Beyond employees’ final days bring chaos, confusion and rude customers: ‘It’s all a mess’
That company has been partly revived by Overstock.com (OSTK), which acquired most of the assets, including the brand name, IP and online platform. Overstock.com Inc. completed its rebrand with the launch of the “new” Bed Bath & Beyond website — bedbathandbeyond.com — in the U.S. in early September.
By geography, most bankruptcies since 2010 were filed in California, Texas and New York, with California accounting for 1,195, followed by 973 in Texas and 665 in New York.
-Ciara Linnane
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09-12-23 1109ET
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