74 PE-Backed Bankruptcies in 2009; Pace Slowed in Second Half

By the middle of the year, we were on pace to double last year’s number of LBO-backed busts. June’s LBO-backed bankruptcy list boasted 46 Chapter 11s; last year’s total was 49.

But then the pace slowed down, companies found ways to avoid the courts and the list finished the year with 74 total bankruptcies. That’s far more than 2008’s total (and blows 2007’s grand total of two out of the water), but it isn’t nearly as high as expected.

We can attribute the slowdown to a little thing called Amend & Extend (or, as Mark Patterson of MatlinPatterson called it, “Amend, Extend and Pretend”). Midway through the year, lenders realized they couldn’t be complete jerks about their loans if they didn’t want a tsunami of bankruptcy cases on their hands, so they relented, allowing sponsors and their companies to “kick the can down the road” (another buzzy phrase of the year) and extend debt maturities.

Whether or not that solution will prove to save all the overlevered companies out there has yet to be seen, but for 2009, it was a saving grace. Download the entire spreadsheet below.

2009 PE-Backed Bankruptcy List

(Our usual disclaimer: the total does not count minority stake bankruptcies but the spreadsheet has a separate listing of those. We do not include bankruptcies of companies backed by hedge funds.)


Six New PE Bankruptcies in November – Year’s Total at 72

Five More Bankrupt Companies That Earned Their Private Equity Backers a Return

Monthly PE-Backed Bankruptcy List: The Mega-buyouts Are Beginning To Crack

Happy Halloween: PE-Backed Busts Jump in October

LBO-Backed Bankruptcy List: On Pace to Double Last Yearâ€TMs Total

LBO-Backed Bankruptcy List: 24 Total, No Mega-Busts in Q1

The Final List: 49 PE-Backed Bankruptcies in 2008