The year 2008, globally known as the year of the great recession, affected the business operations of companies worldwide. The effects of it started in 2007 and are said to have stayed till 2009. Therefore, many firms filed for bankruptcy as they struggled to sustain themselves in the crashing market. The filing surged up to 31 percent in just one year.
Similarly, the COVID-19 outbreak has affected the financial markets yet again and has made many firms file for bankruptcy. For instance, recently HERTZ, a car rental company, filed for bankruptcy protection in the US owing to the impact of Coronavirus on its business.
Here are some of the firms that filed for bankruptcy in 2008 and 2009:
Filing date and year: September 15, 2008
Assets: $ 691.06 billion
The global financial firm founded in 1847, was known for investing heavily in subprime mortgages. But in 2008, the firm’s assets went down to zero which led the bank to close down. The bank filed for bankruptcy protection under chapter 11. After that, the bits of the bank went among financial companies such as Barclays and Nomura Securities.
Filing date and year: September 26, 2008
Assets: $ 327.9 billion
The saving bank holding company faced the largest bank failure in US history. In other words, the bank had depositors withdraw more than 16 billion dollars in June 2008; therefore, forcing the federal government to put the bank in receivership. In addition, JP Morgan Chase bought all the company’s assets and liabilities. Finally, the bank filed for chapter 11 bankruptcy in the US.
Filing date and year: June 1, 2009
Assets: $ 91.05 billion
General Motors is the largest multinational company to file for bankruptcy protection. The company received a federal bailout of $ 68 billion, out of which 51 billion dollars was for the automaker and rest for GM financing.
Filing date and year: November 1, 2009
Assets: $ 80.45 billion
The CIT Group, a financial services group got caught between the subprime mortgage lending debacle. Above all, it became a bank holding company after it received 2.3 billion dollars in the bailout funding. Further, the firm quickly recovered from bankruptcy in a month of filing for the protection.
Filing date and year: May 1, 2009
Assets: $ 36.52 billion
The firm was an initial victim of the collapse in housing prices. Subsequently, it was forced to reinstate its fiscal in 2007. However, when it was unable to raise enough cash to meet the margin call. This made the firm to file for bankruptcy protection. Certainly, the company never made full recovery.
Moreover, there were other companies that filed for bankruptcy during the recession including Chrysler, MF Global in 2011, Lyondell Chemical, Tribune Company, and more.