The pace of large corporate bankruptcy filings slowed in the third quarter, but new data shows 2024 is still on track to surpass 2023 in terms of business bankruptcies of all sizes.
That’s according to a new report from BankruptcyData.com, which counted 9,392 business bankruptcy filings through the end of Q3, or a 25% increase over the 7,503 business bankruptcies during the same period of 2023.
The third quarter saw more than 2,500 filings, a downturn from the second quarter’s near-3,500 filings and roughly 3,100 filings in Q1.
The rate of large corporate bankruptcies with liabilities in excess of $500 million is also trending down, from 12 such filings in Q1 and 14 large corporate filings in Q2 to just seven in the third quarter.
Weil, Gotshal & Manges nabbed two debtor retentions out of the seven large corporate bankruptcies in Q3, with the firm representing Avon Products in Delaware and data analytics company Mobileum in Houston.
Davis, Polk & Wardwell was retained last month by one of the biggest debtors of Q3, Big Lots, which identified more than $3 billion in liabilities in its Delaware filing.
In a Chapter 11 with nearly as much debt, Sidley Austin was tapped in July to represent appliance retailer Conn’s and its $1.9 billion in liabilities.
And in a case of opportunism, Paul, Weiss, Rifkind, Wharton & Garrison was approved in August to represent Enviva, a wood pellet manufacturer that filed for Chapter 11 in April with $2.6 billion in liabilities. The company initially hired Vinson & Elkins as debtors counsel only to have the firm’s application denied by Eastern District of Virginia bankruptcy Judge Brian F. Kenney on the basis of a conflict of interest.
Delaware hosted three of the seven Q3 Chapter 11s with more than $500 million in liabilities while the Southern District of Texas saw two; the Northern District of Texas and the Southern District of New York saw one each. Delaware has also been more popular than Houston over the course of 2024, with 13 large corporate bankruptcies landing there compared to nine in Houston.
However, the judges on the complex case panel of the Southern District of Texas remain in Big Law’s good graces, even as former regional juggernaut Kirkland & Ellis stays away from the district following a scandal involving a former partner at Jackson Walker, Kirkland’s frequent local counsel in Houston. Judge Christopher Lopez received the most large corporate Chapter 11s so far this year at five, while Judge Marvin Isgur tied Delaware judges Craig Goldblatt and Karen Owens at three each.
A handful of cases filed earlier this year have surpassed $10 million in legal fees for debtors counsel, according to BankruptcyData.com data. Kirkland has made more than $29 million this year from two February bankruptcies, with the firm billing more than $19 million in the Chapter 11 of biotech firm Invitae and more than $10 million in the bankruptcy of Amazon aggregator Thrasio Holdings.
Meanwhile, Weil has billed more than $18 million in the bankruptcy of senior care center chain Cano Health, and Paul Weiss has billed more than $13 million in the bankruptcy of ferry operator Hornblower Group.