The number of large corporate bankruptcy filings during the twelve-month period ending June 30, 2026, was down compared to the preceding twelve months, but remained elevated compared to long-term historical averages, according to a new report from Cornerstone Research. In the firm’s press release about the report, the report’s co-author is quoted as saying that the elevated bankruptcy rate reflects “persistent challenges of the broader economic environment for companies that rely on debt financing.” The report, which is entitled “Trends in Large Corporate Bankruptcy and Financial Distress: Midyear 2026 Update,” can be found here. Cornerstone Research’s press release about the report can be found here.

The report is based on a database of 1,781 large corporate Chapter 7 and Chapter 11 bankruptcy filings from January 1, 2025, through June 30, 2026. The bankruptcies involved public and private companies with over $100 million in assets at the time of the filing. The report also analyzes “mega” bankruptcies, involving companies with over $1 billion in assets at the time of filings. The dataset contains 504 mega bankruptcies from January 1, 2005, through June 30, 2026.

According to the report, during the twelve months ending June 30, 2026, 100 companies with over $100 million in assets filed for Chapter 7 or Chapter 11 bankruptcy, compared to 117 during the twelve-month period ending June 30, 2025, representing a decrease of 15%. Though the number of large bankruptcy filings declined in the most recent twelve-month period compared to the prior twelve months, the number of bankruptcy filings during the most recent twelve-month period was still 22% above the 2005-2025 annual average of 82 bankruptcies.

On the other hand, only 20 of the large companies that filed for bankruptcy in the twelve months ending June 30, 2026, were publicly traded companies, compared to an annual average of 44 public company filings during the period 2005-2025.  

In the twelve months ending June 30, 2026, there were 28 “mega” bankruptcies, a decrease from the 32 mega bankruptcies in the twelve months ending June 30, 2025, but still above the 2005-2026 annual average number of mega bankruptcies of 23.

With respect to the 28 mega bankruptcies, the report states that the most commonly cited “drivers of financial distress” in those bankruptcies’ first day declarations were “(i) reduced demand due to consumer preferences, market competition, and/or industry factors; (ii) challenges in the regulatory, legal, and policy landscape; (iii) reduced demand and/or increasing costs due to high inflation; and (iv) increasing operational and/or financing costs due to high interest rates.”

Reduced demand was cited as a factor in 73% of the mega bankruptcies. Challenges in the regulatory, legal, and policy landscape were cited in 65% of the first day declarations. Reduced demand or increasing costs due to high inflation was cited in 58% of the mega bankruptcies. The impact of high interest rates was identified as a driver of financial distress in 38% of the mega bankruptcies.

Interestingly, with respect to the companies that identified the regulatory, legal, and policy landscape as a factor, the most commonly cited issue was “international trade and tariffs.” The report specifically notes that “tariff policy was cited as a driver in five mega bankruptcies.”

In the twelve months ending June 30, 2026, the Manufacturing, Services, and Finance, Insurance, and Real Estate industries had the highest share of bankruptcy filings, each accounting for 21%-22% of filings.

The most common venue for large corporate bankruptcies in the most recent measurement period was the Southern District of Texas, which took over the top spot from the District of Delaware. The top five bankruptcy venues (Southern District of Texas, District of Delaware, Northern District of Texas, District of New Jersey, and Central District of California) accounted for 77% of the large corporate bankruptcies in the twelve months ending June 30, 2026, and 69% of the large corporate bankruptcies in the first half of 2026.

In an analysis that readers of this blog may find interesting, the report specifically addresses the increasing role of private credit in corporate debt financing. As readers may recall, in numerous posts in recent months  (for example, here), we have addressed the growing number of private credit-related claims. (“Private credit” is debt financing provided by non-bank lenders, including private credit funds and business development companies [BDCs].)

The report notes that private credit has grown as a source of corporate debt financing for borrowers over the last five years. The report also notes that “multiple mega bankruptcy filers received private credit financing.”  Two specific bankruptcy filers mentioned in the report as having received private credit financing are First Brands and Tricolor, both of whose mega bankruptcies led to high-profile D&O claims (as discussed here and here, respectively).

The report specifically cites figures showing stress in the private credit financing arena. The report notes that the S&P index tracking BDCs declined over 20% in the twelve months ending June 30, 2026, observing further that “market commentators have pointed to high-profile defaults and loan exposure to software companies at risk of AI disruption as contributors to the price decline.”