From healthcare to retail, private equity’s failures pile up in second half of 2025

A series of recent high profile bankruptcies highlights the devastating effects the private equity model can have on workers, suppliers, communities, and investors. 

PESP’s regular reports and Private Equity Bankruptcy Tracker seek to provide transparency and highlight trends in the industry as private equity buyouts grow in nearly every sector of the economy. 

The private equity model prefers short-term profits and rapid value extraction over the long-term stability of the companies in their portfolios. Private equity firms’ over-reliance on large debt loads, cost-cutting measures, and aggressive financial policies can limit long-term prospects of and contribute to higher bankruptcy rates among private equity-owned firms.

The credit rating entity Moody’s highlighted private equity’s outsized role in bankruptcies, noting in 2024 that private equity-backed companies defaulted at twice the rate of non-private equity-backed companies. Moody’s reports that aggressive use of debt and rising interest rates created a difficult environment for private equity firms to sell companies. This can lead to private equity firms using even more debt to fund payouts to investors, which only contributes more to the threat of default and bankruptcy.

Platinum Equity: Poster child for risky private equity behavior

An October 2025 article in Bloomberg covers private equity firm Platinum Equity and its CEO Tom Gores, describing his glitzy lifestyle and the lavish trappings of the firm’s employees, including celebrity friends, courtside basketball seats, a private jet, and the firm’s lavish Beverly Hills HQ, a “neo-Georgian building” adorned with columns and fountains, along with personal chefs and other expensive perks for the firm’s employees and their friends. This stands in firm contrast to “the breadth of distress among [Platinum equity’s] investments”: having the highest number of defaults of peer private equity firms in a report that highlighted outsized defaults across the industry. The article highlights a series of poorly performing Platinum Equity-owned companies that have gone bankrupt, defaulted, or are struggling under the weight of debt burdens.

LifeScan

Platinum Equity acquired LifeScan, a glucose monitor maker, from Johnson & Johnson in a $2.1 billion deal in 2018. The previous year, the company reported roughly $1.5 billion in net revenue. But the company struggled after finding itself unable to enter the market of newer, more user-friendly models of glucose monitors and filed for Chapter 11 bankruptcy in July, in a reorganization that would eliminate 75% of the company’s $1.7 billion in debt. 

Aventiv

Platinum Equity-owned Aventiv, a prison and detention telecom company, was profiled in a PESP report earlier this year, documenting public criticism of its exploitative business model. Aventiv subsidiary Securus faced regulatory hurdles before Platinum Equity was forced to hand its ownership of Aventiv over to lenders. In April 2025, the embattled prison telecommunications company announced a distressed debt-for-equity exchange, an out of court debt restructuring frequently used to avoid bankruptcy, with creditors taking over the company. 

United Site Services

United Site Services, a portable-toilet provider Platinum Equity acquired in 2017, restructured its debt outside of bankruptcy more than a year ago, but it continues to trade at levels suggesting the market views its debt load as unsustainable. Second-quarter results showed plunging revenue and earnings. United Site Services is operating under a forbearance agreement with lenders that’s set to expire in early December and Platinum Equity is preparing to hand the company over to lenders, Bloomberg reported recently. 

More PE-backed bankruptcies in the second half of 2025

Anthology

In September, Veritas Capital-owned education-tech company Anthology filed for Chapter 11 bankruptcy, after following the traditional private equity playbook of debt-fueled consolidation. 

In 2020 and 2021, Veritas acquired multiple education tech firms, rolling them up into one, under the name Anthology, using over $1.8 billion in debt. During a time of significant investment in education tech due to the COVID pandemic and low interest rates, the 2021 deal was sold as “the most comprehensive and modern EdTech ecosystem at a global scale for education.”

But as management and integration of these companies proved difficult to the new private equity owners and interest rates rose, the company found itself in significant trouble, leading to the 2025 bankruptcy and proposed spin off of companies to private equity firm Oaktree Capital. 

Genesis Healthcare

Genesis Healthcare, once the largest skilled nursing operator in the United States, filed for Chapter 11 bankruptcy in July 2025, burdened with more than one billion dollars in debt. The company’s collapse caps years of financial deterioration shaped by a private equity strategy of asset stripping, high-risk borrowing, and recurring regulatory violations.

Genesis’s financial unraveling reflects a familiar pattern: private equity owners extracted value through sale-leaseback deals and layered debt, while the company struggled to maintain operations. 

Private equity firm ReGen Healthcare (affiliated with Pinta Capital Partners) acquired a controlling share in Genesis after a 2021 restructuring after “the severity of the pandemic dramatically impacted patient admissions, revenues and costs, compounding the pressures of our long-term, lease-related debt obligations,” according to a company representative. 

A little over four years later, Genesis found itself with unsustainable levels of debt, causing the bankruptcy that led a judge to pause over 200 [pending] lawsuits alleging malpractice, wrongful death or other injury against Genesis in October 2025. This prompted a letter from US Senator Elizabeth Warren expressing concerns that ReGen Healthcare “may be using the bankruptcy system to wipe away Genesis’s debts and claims to victims by selling the company at a discount to insiders.”

Claire’s

Claire’s, the tween jewelry retailer that operates over 1000 stores with at least 17,300 employees across the U.S. and Canada filed for bankruptcy protection for the second time in August 2025. The popular store has had a relatively long history with private equity: in 2007, Apollo Global Capital purchased Claire’s for $3.1 billion in a leveraged buyout, loading the retailer with $2.5 billion of debt per 2013 filings related to the company’s first failed IPO attempt. Eleven years later, Claire’s filed for bankruptcy for the first time as it struggled under $2.1 billion in long-term debt. The restructuring that followed passed the company into the hands of creditors and private equity firms Elliott Investment Management and Monarch Alternative Capital. By the time Claire’s declared bankruptcy again in August, the retailer had over $1 billion in liabilities, according to bankruptcy filings. As the store initiated liquidation of its assets, private equity firm Ames Watson agreed to acquire Claire’s and keep the majority of its stores open.

Renovo

In 2021, Audax Private Equity combined three home remodeling businesses it had acquired to create Renovo. The firm’s announcement said: “Through its growing network of brands, Renovo’s platform provides a full range of products, installation services, and premier customer service experience to homeowners throughout the United States.” 

Renovo filed for bankruptcy in November 2025. An in-depth New York Times profile on the bankruptcy explains in painful detail how the private equity model can set a company up to fail, creating long lasting damage to workers and communities in the process. In less than five years, the company went from an ambitious combination of successful companies to a bankruptcy with “$50,000 in assets and more than $100 million in liabilities, with hundreds of creditors.” 

The NYT profile describes a debt-fueled buyout spree in the roofing and construction industry that has led to private equity ownership of “most of the largest roofing companies in the country.” Renovo was created by a portion of that buyout spree, a combination of seven large construction companies fueled by “about $150 million from some of the largest private lenders in America: BlackRock, Apollo and Oaktree Capital Management.” 

One employee discussed how the focus on cutting costs hurt the wellbeing of the company. “The biggest expenditure is labor, so they start renegotiating with the installers and say, ‘The 10 to 12 percent you were making is now going to be 8,’” Mr. Elam said. “The A team walks out the door, and we’re left with the B’s and the C’s. So quality went down, and complaints went up.”

Around 1,500 workers at the firm were quickly terminated, many without receiving their last paychecks or reimbursements for work related expenses, as homeowners saw projects ended without being completed.