Biggest bankruptcies in American history, who's next??
American Airlines declared for bankruptcy today making them the last of the major airlines to seek protection and (hopefully) move towards profitability. With AMR and MF Global going down recently, an interesting story came up chronicling the largest 11 bankruptcies in history.. Any guesses on which giant will fall next?
11. Pacific Gas & Electric Co (2001)
What happened: PG&E, California's largest utility company, fell victim to the state's electricity crisis of 2000-2001. Blackouts swept the state and costs soared, blamed in large part on California's deregulation of the energy industry in 1996—the first state to do so.
10. Thornburg Mortgage (May 2009)
What happened: The housing crash and credit crunch doomed the mortgage lender. Thornburg's fall demonstrated that the crisis went far beyond subprime lenders; Thornburg "specialized in making mortgages larger than $417,000 to borrowers with good credit." The company was liquidated.
9. Chrysler (April, 2009)
What happened: As the financial crisis spread to the wider economy and threatened automakers, President Obama intervened and ordered Chrysler into bankruptcy. The United Automobile Workers were given control of the company, with the federal government and Italian carmaker Fiat as minority stakeholders.
Two years out of bankruptcy, Chrysler was profitable again.
8. MF Global (Oct 31, 2011)
The Jon Corzine-led brokerage became the largest American victim of the European debt crisis to date.
7. Conseco (2002)
What happened: The insurer and financial firm overaggressively acquired companies in the 90s. Its purchase of Green Tree Financial, a financier of mobile-home sales, was particularly damaging in the long run.
Conseco emerged from bankruptcy in 2003.
6. Enron (2001)
What happened: Energy giant Enron was destroyed by a giant scandal that turned it into the ultimate posterchild for outrageously fraudulent accounting practices.
4. General Motors (June 2009)
What happened: The pillar of American manufacturing, already hurt by years of weakening sales, was dealt a death blow by the financial crash. Only a government bailout saved the firm from annihilation.
3. WorldCom (July 2002)
What happened: The telecommunications heavyweight joined Tyco and Enron in early-2000s accounting and executive malpractice scandals. CEO Bernie Ebbers went to jail for what was then the "largest corporate fraud in U.S. history."
WorldCom left bankruptcy renamed MCI in 2004 and was purchased by Verizon in 2005.
2. Washington Mutual (September 2008)
What happened: Lehman Brothers, the first big domino to fall in 2008, knocked WaMu over. Regulators seized the savings-and-loan holding company after "customers withdrew $16.7 billion over 10 days."
JPMorgan then bought WaMu, making a Too Big To Fail bank even bigger.
1. Lehman Brothers (September 2008)
What happened: As the financial meltdown accelerated, the government made the now-controversial decision not to bail out the giant investment bank. Lehman was eventually liquidated.