Two months ago, we said that it was just a matter of time before a "biblical" wave of bankruptcies was about to be unleashed on the US as a result of the coronavirus pandemic...
... and sure enough, the first wave is corporate defaults is starting to wash across US shores, with companies in every industry - from retailers, to airlines, and restaurants - but also sports leagues, a cannabis company and an archdiocese plagued by sex-abuse allegations. These are some of the more than 110 companies tracked by Bloomberg that have declared bankruptcy in the U.S. this year and blamed Covid-19 in part for their demise.
While some were in deep financial trouble even before governors ordered non-essential businesses shut to help contain the spread of the virus, most will reorganize and emerge from court smaller and less-indebted. But the hardest hit, are liquidating assets and closing for good.
Among the filers are some of the most iconic names of US business: Hertz, J.C. Penney and as of last week, Brooks Brothers, too. However most are small and medium-sized businesses scattered across the country. Their downfall might not normally garner much attention, but it does underscore the full extent of the damage Covid-19 has inflicted on the economy.
The list below compiled by Bloomberg is only a snapshot of the thousands of corporate entities that have landed in bankruptcy court since the pandemic took hold in March.
The list of companies runs the full gamut - some had billions of dollars in assets; others had only a handful of employees on payroll. Among the smallest is Sugarloaf Craft Festivals, which organized artist fairs across the country. It simply saw no way to keep going in the era of social distancing. Ditto for Bounce For Fun, which rented bounce houses and water slides for school parties and spring festivals in the Dallas area. The owner says cancellations had hit 100% this year, with little hope for a rebound next season. The biggest - so far - is rental giant Hertz, which survived two world wars, a great depression, a cold war, but ultimately folded, beaten by a tiny Chinese virus.
Below is the full list of bankruptcies compiled by Bloomberg: