Over the years, some big companies have grown and improved, while others have declared bankruptcy and even closed their doors. With the global economic crisis of the last few years, several huge companies have ended up in bankruptcy. In fact, of the 22 largest bankruptcies in history, eight occurred within the last three years. Some of the companies have survived and are still in business, but others no longer exist. There are many reasons why these companies declared bankruptcy, ranging from overambition expansion to criminal CEOs. What is interesting when one looks at the biggest bankruptcies is that the range of industries is very narrow. Most of the companies are from energy, finance, and auto manufacturing.
One of the most famous bankruptcies was Chrysler. In 2009, the automaker was ordered into bankruptcy by the President of the United States. Control of the company was turned over to the United Automobile Workers and both the U.S. government and Fiat remained minority stockholders. By 2011, Chrysler was once again profitable.
In later 2009, commercial lender CIT group filed Chapter 11 bankruptcy. They could not recover from an overreaching expansion. However, 38 days after filing bankruptcy, the Troubled Asset Relief Program (TARP) bailed them out.
In JulWorldCom, one of the largest telecommunication companies in the world was forced to declare bankruptcy when their CEO Bernie Ebbers was convicted of corporate fraud. The company was bought by Verizon in 2005.
When Lehman Brothers was forced to file for bankruptcy in September of 2008, it accelerated the financial meltdown that eventually resulted in a global economic crisis. The federal government decided not to help them and the company was eventually liquidated.
The demise of Lehman Brothers resulted in a failed financial institution domino effect that eventually saw the fall of Washington Mutual. The company was seized by regulators and it was bought by JPMorgan.
No matter how large a company is, it can still fail. Some recover while others close their doors. The bankruptcies of these large companies show the fragility of our economy.