Corporate bankruptcy petitions in the U.S. surged last month and first-quarter filings this year reached the highest level since 2010, according to new data.
S&P Global Market Intelligence reported Thursday that it recorded 71 corporate bankruptcies in March, marking the fourth straight month of increases and the highest monthly tally since July 2020.
In the first three months of 2023, 183 major companies announced bankruptcies, S&P Global said, which is the greatest total for the period in the past dozen years.
The analysts included both public and private firms with public debt that had at least $2 million in assets or liabilities at the time of filing, as well as private companies reporting at least $10 million in assets or liabilities.
The sectors hardest hit so far this year have been consumer discretionary with 23 filings, followed by financials and health care, both with 14 bankruptcies, according to the data.
“It Is clear that the rise in bankruptcies is a product of weaker consumer spending due to inflation as well as rapidly rising interest rates,” Adam Kobeissi, founder of global markets publication The Kobeissi Letter, told FOX Business. “Over 20% of bankruptcies have been in consumer discretionary and consumer staples companies, both sectors that are highly prone to high inflation.”
Another 13 companies filed in the industrials sector, and eight filed both in the energy and information technology segments.
Several prominent firms went under or sought protection to reorganize in March, most notably Silicon Valley Bank. which filed for Chapter 11 one week after being shut down by authorities amid a run on the bank on March 10.
SVB is so far the largest bankruptcy of 2023, followed by Sinclair Broadcasting Group’s regional sports business Diamond Sports Group, Avaya Inc., Serta Simmons Bedding, and Party City – all of which listed liabilities in the billions of dollars.