Top 10 Bankruptcies of Last Decade

Hard landing for a difficult decade.

The global credit crisis has taken down some of the nation's largest banks and lenders in the past two years, when half of the decade's 20 biggest bankruptcies occurred. The decade's financial failures also included two of the most infamous names in business: Enron and WorldCom.
Carmakers, airlines and energy providers helped round out the list. General Motors, Delta Air Lines (DAL) and Pacific Gas & Electric (PCG), for instance, shed debt and jobs by reorganizing. The big bankruptcies of lesser-known companies -- IndyMac Bank, financial-services provider Refco and Lyondell Chemical, among them -- also made headlines.
Here are the largest bankruptcies (ranked by total assets) of the past 10 years, according to data compiled by BankruptcyData.com.

No. 10: Pacific Gas & Electric

California's biggest utility filed for Chapter 11 bankruptcy protection after deregulation in the state caused wholesale energy prices to soar, making it difficult for the company to buy energy for less than the cost of selling it. The company, which had 13 million customers at the time, had amassed $8.9 billion in debt. Pacific Gas & Electric (PCG) emerged from bankruptcy in April 2004.

No. 9: Thornburg Mortgage

Thornburg, which specialized in large loans, filed for Chapter 11 in May after the value of its loans plunged and the number of new borrowers dried up. The company liquidated its assets and went out of business.

No. 8: Chrysler

The Obama administration forced Chrysler to file for bankruptcy in April after it failed to reach an agreement to partner with Italian automaker Fiat. The company exited from bankruptcy with the help of $12.5 billion in government aid and Fiat's acquisition of a 20% stake. Chrysler aims to double its sales in five years by revamping its brands.

No. 7: Conseco

The one-time insurance giant sought bankruptcy protection after a spate of acquisitions left it with $6.5 billion of debt. The most damaging deal was its 1998 purchase of Green Tree Financial for $6 billion. Conseco (CNO) emerged from bankruptcy protection in September 2003.

No. 6: Enron

Enron went from a Wall Street darling to a symbol of corruption after the energy company disclosed $1.2 billion in write-downs that sapped shareholder equity. Top executives, including Jeffrey Skilling and Kenneth Lay, were convicted of fraud for overstating profits.
Lay died before he was sentenced; Skilling was sent to prison. The scandal prompted Congress to pass the Sarbanes-Oxley Act, which tightened financial-reporting rules.

No. 5: CIT Group

CIT Group (CIT), a major lender to small businesses, sought bankruptcy protection in November after trying for months to restructure $65 billion of debt. The company faltered as the credit crisis froze its funding sources. CIT exited bankruptcy in December under a restructuring plan that will cut $11 billion of debt through a debt-to-equity swap.

No. 4: General Motors

General Motors shed $48 billion in debt and health care obligations through a 40-day bankruptcy this year. The company closed plants and set out to sell some of its divisions during the period. The U.S. government took a 60% stake in General Motors as part of its rescue plan, which included $50 billion in aid from the U.S. and Canadian governments.

No. 3: WorldCom

The telecommunications company filed what was then the biggest bankruptcy ever after amassing $41 billion of debt. Three years later, WorldCom founder Bernard Ebbers was convicted of fraud and conspiracy for overseeing $11 billion in financial misstatements. He's serving a 25-year prison sentence.

No. 2: Washington Mutual

Washington Mutual became the biggest bank holding company to fail after customers, worried about its stability, rushed to withdraw funds, depleting the company's capital. WaMu had been weakened by bad investments in subprime mortgages. The Federal Deposit Insurance Corp. seized the bank and brokered the sale of its assets to JPMorgan Chase (JPM).

No. 1: Lehman Brothers

The 158-year-old investment bank made history as the biggest company to file for bankruptcy. Lehman failed to find a buyer in September 2008 after it lost $7 billion on failed bets on risky subprime mortgages during the previous two quarters. Stocks plunged around the world after Lehman's collapse as the U.S. government devised plans to bail out its competitors.