Private equity-backed bankruptcies continue in Q2 2025

Private equity continues to play a disproportionate role in the largest corporate bankruptcies in the U.S., raising serious concerns about the financial strategies used by the industry and their implications for workers, consumers, and the economy. In the second quarter of 2025, 6 of the 14 largest bankruptcies,  those with over $1 billion in liabilities, were companies backed by private equity. In 2024, private equity-owned companies comprised 11% of all bankruptcies and 54% of large bankruptcies. Behind these high-profile bankruptcies lie deeper challenges within the private equity industry. Many private equity firms are struggling to exit investments through sales or IPOs, and as a result, companies are being held longer in distressed conditions with little room for operational recovery. ^[1][2]

2024 Private Equity Bankruptcy Tracker

Private Equity-Owned Bankruptcies with Over $1 Billion in Liabilities

*Private equity firms comprise a minority share of the investment consortium

In June 2025, Marelli, a supplier for automakers, including US manufacturers, filed for Chapter 11 bankruptcy.^[3] KKR acquired Marelli in 2019. The Marelli CEO cited tariffs against automotive manufacturers and suppliers as the cause of the bankruptcy; however, in August 2024, Marelli expressed concern about liquidity and the need to modify credit agreements. This is the company’s second restructuring effort in three years.^[4]

In May, the private equity-owned fiber network provider Everstream filed for Chapter 11 bankruptcy. It reported over $1 billion in debt obligations^[5] and had more than 21x debt to earnings as of December 2024.^[6] The company plans to close all operations in Pennsylvania, impacting employees and consumers in the region.^[7]

In June, Powin, a major battery storage system integrator, filed for Chapter 11 bankruptcy. Powin is owned by a group of private equity firms, including Trilantic Energy Partners North America, Energy Impact Partners, Greenbelt Capital, and GIC.^[8] It also has significant debt financing from KKR.^[9] In May, the company alerted employees of 250 potential layoffs in Oregon.^[10] Powin reported $300 million in debt.^[11]

Other noteworthy bankruptcies by private equity-owned companies in Q2 include Harvest Sherwood Food Distributors, owned by Twin Ridge Capital Management, as well as CareerBuilder and Monster, both owned by Apollo Global Management.

Harvest Sherwood was the largest US independent wholesale food distributor and was acquired by Twin Ridge Capital in 2017. Harvest filed for Chapter 11 bankruptcy on May 5. It employed around 1,500 people before ceasing operations and terminating all employees.^[12]

CareerBuilder and Monster are two of the largest job recruitment websites. The joint venture between the companies, owned by Apollo Global Management, filed for bankruptcy in June with almost $400 million in debt.^[13] The companies have so far announced that they will lay off 390 employees in Illinois.^[14]

In addition to bankruptcy filings, private equity-owned companies are also defaulting and restructuring out of court through distressed exchanges. A distressed exchange is a type of financial restructuring in which a company negotiates with its creditors to swap existing debt for new debt or equity, often at terms that are less favorable to the creditors. While they allow companies to circumvent a formal bankruptcy process, distressed exchanges often lead to outcomes strikingly similar to those seen in bankruptcies, affecting creditors, workers, and consumers in profound ways.

For example, Wellness Pet, a Clearlake Capital-owned pet food company, completed a distressed exchange in June 2025.^[15][16] S&P Downgraded the company’s credit rating in 2024 and listed the company as at risk of near-term default or debt restructuring because of its weak operating performance, negative free operating cash flow generation, very high leverage, and deeply distressed debt trading levels.^[17] In addition, One Rock Capital Partners-backed Nexeo Plastics completed a distressed exchange in June 2025.^[18] In April, Aventiv Technologies, a prison cell service company backed by Platinum Equity, completed a debt-for-equity recapitalization (see PESP’s analysis of the Aventiv restructuring here).^[19]

Private equity firms have demonstrated overreliance on cost-cutting measures and aggressive financial policies with limited long-term prospects. Focusing on immediate financial gains can lead to significant mismanagement and economic instability, contributing to higher bankruptcy rates among private equity-owned firms.

A critical driver of this instability is the widespread use of leveraged buyouts. A leveraged buyout is a strategy in which a private equity firm finances its acquisition of a company using debt secured by the company being acquired, rather than using its own capital or taking on the debt itself. This tactic saddles private equity-owned companies with substantial debt, often draining resources that could otherwise be invested in innovation, workforce development, or adapting to market changes. Instead, firms under private equity ownership must channel a significant portion of their revenue toward servicing this debt, leaving them vulnerable to financial distress and bankruptcy.

Bankruptcies are a key bellwether signaling the broader risks associated with private equity investments. For investors and the public alike, bankruptcy trends mark a critical moment, highlighting the industry’s need for regulation and transparency.

^[1]https://privateequityinfo.com/blog/holding-periods-continue-to-grow-but-could-peak-in-2025

^[2]https://www.bloomberg.com/news/articles/2025-01-16/private-equity-faces-pockets-of-distress-for-long-held-assets

^[3]https://www.freep.com/story/money/cars/2025/06/13/marelli-files-chapter-11-bankruptcy-tariffs/84184455007/

^[4]https://www.costar.com/article/2100438301/kkr-backed-global-auto-supplier-files-for-chapter-11-bankruptcy

^[5]https://www.businesswire.com/news/home/20250527278639/en/Everstream-Reaches-Agreement-for-Sale-of-Business-to-Bluebird-Fiber

^[6] See pg. 21 of Everstream’s bankruptcy declaration filed May 28, 2025. The company reported that as of December 2024 it had “approximately 21.4 times based on total net debt of $967.1 million and EBITDA of $45.2 million.” https://cases.stretto.com/public/x428/13654/PLEADINGS/1365405282580000000113.pdf

^[7]https://www.businesswire.com/news/home/20250527278639/en/Everstream-Reaches-Agreement-for-Sale-of-Business-to-Bluebird-Fiber

^[8]https://mercomcapital.com/energy-storage-provider-powin-secures-200-million-debt-funding/ ; https://www.greenbeltcapital.com/news/powin-announces-135m-growth-equity-investment-from-gic-trilantic-energy-partners-north-america-and-energy-impact-partners

^[9]https://www.energy-storage.news/kkr-provides-us450-million-debt-financing-for-us-bess-firms-powin-and-peregrine/

^[10]https://www.energy-storage.news/powin-files-for-chapter-11-bankruptcy-protection-and-spins-off-project-services-business/#:~:text=US%20battery%20storage%20system%20integrator,the%20District%20of%20New%20Jersey.

^[11]https://www.oregonlive.com/business/2025/06/oregon-clean-energy-company-files-for-bankruptcy-claiming-more-than-300-million-in-debt.html

^[12]https://bondoro.com/harvest-sherwood/

^[13]https://www.reuters.com/legal/litigation/careerbuilder-monster-which-once-dominated-online-job-boards-file-bankruptcy-2025-06-24/

^[14] See Illinois WARN notice for June 30, 2025: https://www.illinoisworknet.com/LayoffRecovery/Pages/ArchivedWARNReports.aspx

^[15]https://clearlake.com/clearlake-to-acquire-wellpet-a-branded-leader-in-premium-natural-pet-food-and-treats/

^[16]https://www.moodys.com/research/Moodys-Ratings-considers-Wellness-Pets-debt-restructuring-a-distressed-exchange-Rating-Action–PR_508878

^[17]https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3247861

^[18]https://www.moodys.com/research/Moodys-Ratings-appends-LD-to-GPDs-PDR-following-distressed-debt-Rating-Action–PR_509035

^[19]https://www.prnewswire.com/news-releases/platinum-equity-supports-proposed-recapitalization-agreement-at-aventiv-technologies-302430617.html