While the economic effects of 2020 will still take years to be fully realized, new data that encompasses the entire year paints a grim picture on how hard businesses were hit due to the pandemic and subsequent restrictions. Most countries around the world saw contractions in GDP, while most businesses in a variety of industries saw drastic declines in sales and new customers. The lucky companies are looking to get back on track in 2021, while data shows many companies won’t get the chance to recover.
In data collected by Bloomberg over the year, there were 244 large companies with liabilities valuing above $50 million that applied for either a reorganization or complete liquidation form of bankruptcy. Many of the large ones happened earlier in the pandemic, with energy companies like Chesapeake Energy, California Resources and Ultra Petroleum all filing for bankruptcy with a combined $24 billion in debt. Another industry, consumer retail, saw longstanding companies fall from COVID-19 closures; among the most recognizable being Neiman Marcus and J.C. Penney.
Overall, 2020 had the most large bankruptcies in the U.S. since the full brunt of the Great Recession in 2009. Banks, investment firms and real estate were some of the hardest hit industries during that time, however like the 2020 pandemic, bankruptcies affected a wide swath of different sectors. Other bankruptcies in 2009 included Reader’s Digest, chemical giant Lyondell Chemical, poultry titan Pilgrim’s Pride, publisher Sun-Times Media, clothing retailer Eddie Bauer and famed elevator-music company Muzak.
