There were a number of reports that commercial chapter 11 filings jumped dramatically in July 2025. Unfortunately, these headlines appear to be from junk data and from sources that should know better such as the American Bankruptcy Institute and Epiq AACER. From working with both organizations in the past, I know they value accuracy. This post is a plea to do better.
The headlines are that commercial chapter 11 filings in July 2025 jumped 78% on a year-over-year basis. Supposedly, there were 911 commercial chapter 11s in July 2025 compared with only 512 in July 2024. Amid all the concerns about our national economy, that would be a notable increase if only it was true. Of those 911 new chapter 11s, almost a third were from the Genesis Healthcare bankruptcy. Ironically, Epiq is the claims agent and keeper of the public docket for the case. When a corporate group files bankruptcy, each one of its affiliates files its own bankruptcy petition. There is no connection between how the corporate group is organized and the size of the case. For example, the similarly sized Del Monte Foods filed bankruptcy with only 18 companies in its corporate group.
The sheer size of the jump should have led to some questioning about the data. Using the Federal Judicial Center's Integrated Petition Database, I crunched some numbers on affiliate filings. The 299 petitions generated by Genesis Healthcare is more than 99.4% of all cases that have filed since 2008. It is a large outlier. That same database informs that the largest number of affiliates in a filing from July of last year was only 21, meaning there was not some hidden corporate behemoth in last year's numbers.
Chapter 11s likely did increase in July 2025 on a year-over-year basis. The Federal Judicial Center database is only current through March 2025, meaning I cannot simply back out the numbers for this past month as did for last year. But, if we simply subtract the 298 affiliate filings from the supposed 912 new case, we still have 613 commercial chapter 11 filings. That would be a 20% increase on a year-over-year basis on the 512 cases presumably counted in the same way, but let's call that an estimate. Some searching on the Almighty Google did not reveal any other big corporate groups that filed in July, but I cannot rule out other possibilities. That commercial chapter 11 filings increased 20% is still noteworthy even if it is not as attention grabbing as press releases that scream about a 78% bump.
I have been writing about the "corporate group" problem and bankruptcy data on this blog since at least 2010. Another round of posts (e.g., here and here) came during COVID when people were using the chapter 11 filing rate as a barometer of the economy, a practice which has its own problems. The well-respected statistics expert, Ed Flynn, was keeping the numbers accurate for the ABI by separately tracking "parent" and "child" corporate filings, but that effort has unfortunately ceased. I would like to think this post will get things back on track, but bankruptcy experts are not known for their optimism.