In 2013, there were a lot more Chapter 7 bankruptcy filings than Chapter 11 — 728,833 to 8,980 to be exact, out of the estimated 1,071,932 total filings. Chapter 11 bankruptcies, however, tend to be of a much larger scale than Chapter 7, which are usually personal cases. As any bankruptcy attorney will tell you, Chapter 11, which also often referred to as a “reorganization plan,” is most often used to reorganize a business, corporation, or partnership, so as to allow the organization to continue doing business but to pay back debt at a reasonable rate. Check out these high-profile Chapter 11 filings — more people and well-known companies have filed for Chapter 11 bankruptcy help than you probably expected:
Enron: The massive energy giant Enron filed for Chapter 11 in 2001 after it was destroyed by a scandal caused by its fraudulent accounting practices. At the time, it’s value was at $65.5 billion.
General Motors: In June of 2009, at at a value of $91 billion, GM went down. The historic automobile giant was delivered its final blow after the financial crash after years of weakened sales.
Washington Mutual:The now infamous domino effect of the 2008 financial crisis, catalyzed by Lehman Brothers, toppled over Washington Mutual on its way down. When regulators seized the company, customers had already withdrawn $16.7 billion over 10 days — one part of the biggest rush on a bank since the Black Tuesday.
Pacific Gas and Electric Co.
In 2001, California’s largest energy company, PGandE, became a victim of the state’s energy crisis. Blackouts became common and energy costs skyrocketed, which many people blamed on the state’s deregulation of the energy industry in 1996. Enron, also on this list, worsened the crisis by cutting off power in a deliberate move to manipulate prices. At the time of bankruptcy, PGandE was valued at $36.15 billion.
Thornburg was liquidated at a value of $36.5 billion after the housing crisis. Even though the company “specialized in making mortgages larger than $417,000 to borrowers with good credit,” they couldn’t save themselves from the subprime mortgage bubble.
Some of these companies restructure and bounced back; some had to liquidate their assets and completely dissolve. All of them relied heavily on their bankruptcy attorney for help with when and how to file for bankruptcy.