The Largest U.S. Bankruptcies

From Lehman to Texaco, the mighty have fallen, taking down billions and billions with them.

Photo: John R. Coughlin

Lehman Brothers Holdings

Rank: 1
Date of bankruptcy filing: 09/15/08
Assets: $691 billion

One of the biggest calamities of the current recession is the fall of the once highly regarded (and onetime fourth-largest) Wall Street investment firm, which was forced to file for bankruptcy protection last September, the largest corporate filing in the history of U.S. bankruptcy court. As a result, the company's North American investment banking and trading businesses and New York City headquarters were sold to British bank Barclays. Some of Lehman's U.S. businesses, including wealth management firm Neuberger-Berman, continue to operate as stand-alone entities under new ownership. And because of the company's global reach, its bankruptcy proceedings are complex, ongoing, and have resulted in the closing of 80 of the bank's smaller subsidiaries.

Washington Mutual

Rank: 2
Date of bankruptcy filing: 09/26/08
Assets: $327.9 billion

Amid fears of insolvency, customers of Washington Mutual withdrew more than $16 billion of deposits over a 10-day period last fall, causing a government regulator to seize the holding company's banking assets and sell them to JPMorgan Chase for $1.9 billion. The following day WaMu filed for bankruptcy protection. What was once the nation's largest savings and loan and sixth-largest bank is now a shadow of its former self. The holding company currently is suing the FDIC for improper seizure and is seeking $13 billion in damages.

WorldCom

Rank: 3
Date of bankruptcy filing: 07/21/02
Assets: $103.9 billion

Once the second-largest long-distance telecom in the U.S. after AT&T, WorldCom filed for bankruptcy protection following the discovery of an $11 billion accounting scandal. In 2003 the company re-dubbed itself MCI, (the name of one of its previous acquisitions), and then emerged from bankruptcy a year later. In 2005 MCI was acquired by Verizon Communications for $7.6 billion and former CEO Bernie Ebbers was sentenced to 25 years in prison after being convicted of securities fraud, conspiracy, and filing false documents. He is serving his term at Oakdale federal prison in Louisiana.

General Motors

Rank: 4
Date of bankruptcy filing: 6/1/09
Assets: $91 billion

The automotive giant, which for many years was the largest U.S. company and reigning king of the Fortune 500, now ranks as the largest industrial company (and fourth-largest overall) to seek bankruptcy protection in the history of American business. The likely outcome of the reorganization will be the emergence of a new version of the company that holds onto Chevy, Cadillac, Buick and GMC. The remaining, poor-performing brands Pontiac, Saturn, Hummer, Saab and Opel might be held by separate, spun-off companies, sold to foreign manufacturers, or simply closed down. As part of the bailout agreement, the U.S. government will own nearly 72.5% of the new company, with the United Auto Workers owning 17.5%.

Enron

Rank: 5
Date of bankruptcy filing: 12/02/01
Assets: $65.5 billion

The collapse of a vast creative-accounting scandal destroyed the nation's largest energy, electricity and natural gas company in 2001. After a long and arduous case that was the most-watched bankruptcy proceeding in history, Enron emerged from bankruptcy protection three years later in 2004. Several of its top executives were later convicted of many counts of securities and accounting fraud. In addition to bringing down accounting firm Arthur Andersen, the Enron scandal is considered a landmark case because it inspired the Sarbanes-Oxley Act of 2002, which set new standards and practices for public companies. In 2007, Enron changed its name to Enron Creditors Recovery Corp. with the intention of liquidating the company's remaining assets.

Conseco

Rank: 6
Date of bankruptcy filing: 12/17/02
Assets: $61 billion

After years of poor executive leadership, the insurance and finance company accrued massive debt of more than $8 billion and was forced to file for bankruptcy in December 2002. It reorganized and reduced debt to $1.4 billion, emerging in less than a year after selling its finance business. Conseco now sells life insurance and supplemental health insurance to more than 4 million customers.

Because of a number of flaws in the settlement system, Conseco's restructuring resulted in an overhaul of the credit default swap market. Recently, Treasury Secretary Timothy Geithner has called for further regulation, saying that over-the-counter derivatives should be traded on exchanges and that dealers be subject to federal oversight.

Click here for the full list of the largest U.S. bankruptcies.