Business bankruptcies are rising briskly. What’s even more worrisome: Many of the troubled companies are large, according to a Wall Street Journal analysis. Corporate behemoths including SVB Financial, Bed Bath & Beyond and Yellow sought chapter 11 bankruptcy protection this year. The filers blamed elevated inflation, higher interest rates, waning government aid and lingering supply-chain disruptions. More corporate filings are likely on the way as high interest rates push big companies over the edge. While any type of bankruptcy signals distress, large-business bankruptcies carry particularly significant economic risks. To be sure, the rise in business bankruptcies is a far cry from the 2008 financial crisis or the 2020 pandemic downturn, when widespread layoffs led to economic pain. Big-business bankruptcies were unusually low last year, so some of the increase reflects a normalization. The economy is still growing as consumers splurge and businesses snatch up workers. Employers added a surprisingly robust 336,000 jobs in September, with hiring widespread across industries. “Companies have been surviving the past few years by taking advantage of the ultralow interest rates,” said Amy Quackenboss, executive director at the American Bankruptcy Institute. “But many of these corporations are seeing those loans come due now, and they’re struggling to refinance because the interest rates now are significantly higher.”
