Private equity behind majority of 2025’s largest bankruptcies

Private equity firms were involved in a majority of the largest U.S. corporate bankruptcies in 2025, according to an updated Private Equity Bankruptcy Tracker released today by the Private Equity Stakeholder Project (PESP). Despite accounting for roughly 7% of the U.S. economy, private equity-owned companies represented a significantly larger share of bankruptcies—particularly the biggest and most disruptive filings.

PESP found that private equity firms played a role in 54% (19 of 35) of the largest U.S. corporate bankruptcies in 2025, defined as cases involving $1 billion or more in liabilities at the time of filing. Private equity was also involved in 51% (21 of 41) of bankruptcies with liabilities of at least $500 million. Overall, private equity-owned companies accounted for 10% of all U.S. corporate bankruptcies last year.

“These findings underscore just how often private equity is at the scene when the biggest companies fail,” said Jim Baker, executive director at PESP. “Large bankruptcies don’t just affect investors. They cost workers their jobs, close stores and facilities that communities depend on, and can undermine access to essential services like healthcare.”

The updated tracker highlights especially severe impacts in retail and healthcare, sectors where bankruptcies are often felt immediately by workers and consumers. In the consumer discretionary sector, private equity-backed companies accounted for more than 71% of the largest bankruptcies in 2025, including familiar brands such as Joann Fabrics, At Home, and Claire’s. In manufacturing, private equity-backed firms accounted for 60% of the largest bankruptcies, reflecting the sector’s vulnerability to debt-heavy ownership structures.

Healthcare bankruptcies were also heavily overrepresented. Private equity-owned companies accounted for 44% of the largest healthcare bankruptcies in 2025. These failures can leave patients with fewer options for care, strain emergency services, and destabilize local healthcare systems, especially in rural and underserved areas.

In addition to chapter 11 bankruptcies, private equity-backed companies have missed debt payments or pursued a distressed exchange, signals of serious financial strain. At least 44% (18 of 41) of companies that pursued distressed exchanges tracked by S&P in 2025 were private equity-backed. While distressed exchanges enable companies to avoid bankruptcy court, the consequences often mirror those of bankruptcy, including layoffs, store closures, and service disruptions, with far less public transparency.

The publication of these findings comes amid a wave of high-profile private equity-backed bankruptcies in early 2026, including Saks Fifth Avenue and Eddie Bauer, heightening concerns that the trend will continue.

“Private equity-backed companies are missing debt payments, completing distressed exchanges, and filing for bankruptcy at a rate disproportionate to the industry’s market share. These trends don’t signal stability for the industry,” Baker added. “Highly leveraged acquisitions, like the recent private equity takeover of Walgreens, put enormous pressure on companies that millions of Americans rely on for everyday needs and healthcare access. A bankruptcy at that scale would be a community-level disaster, not just a corporate failure.”