Private Equity Bankruptcy Tracker

PESP has released the Private Equity Bankruptcy Tracker

A running list of U.S. bankruptcies connected to private equity 

Updated February 20, 2026

For data on 2024 PE-connected bankruptcies, click here.

Key Findings 

• Disproportionate Role in Bankruptcies and Distressed Exchanges
  • Private equity firms played a role in 54% (19 out of 35) of the largest U.S. corporate bankruptcies during 2025 (bankruptcies with liabilities of $1 billion or greater at the time of filing).
  • Private equity firms played a role in51% (21 out of 41) of large U.S. corporate bankruptcies during 2025 (bankruptcies with liabilities of $500 million or greater at the time of filing).
  • Private equity firms played a role in 10% (39 of 388 filings) of all corporate bankruptcies in 2025, despite the fact that private equity accounts for 7% of the U.S. economy.
  • According to S&P data, private equity firms played a role in 44% (18 out of 41) of distressed exchanges, which are out-of-court debt exchanges that allow companies to circumvent a formal bankruptcy process, but are often accompanied by similar outcomes to those seen in bankruptcies.
• Sectoral Overrepresentation
  • The impact of private equity ownership is notable in specific sectors. In manufacturing, private equity-backed companies accounted for 60% (3 of 5) of the largest bankruptcies.
  • In the largest consumer discretionary bankruptcies, private equity-backed companies account for 71.43% (5 of 7), including brands like Joann Fabrics, At Home, and Claire’s.
• Worker and Community Impacts
  • Large bankruptcies, which are overrepresented among private equity-owned companies, disproportionately affect workers and local economies.
  • Private equity-related bankruptcies in 2025 have resulted in at least 36,802 layoffs in only 13 private equity backed bankruptcies, likely a significant undercount as it only counts required or voluntarily disclosed numbers (typically, companies are only required to report when 50 or more employees are laid off from a single location).
  • Private equity-backed companies account for 44% of the largest (4 of 9) healthcare bankruptcies in 2025. These bankruptcies are especially devastating to consumers and may leave people without access to essential care.
• Investor Outcomes
  • Despite their role in precipitating bankruptcies, private equity firms can emerge financially unscathed, profiting from management fees and dividends.
• Need for Regulatory Oversight and Investor Responsibility
  • Investors, including public pension funds, are increasingly adopting policies to mitigate labor and financial risks. The disproportionate role of private equity in bankruptcies underscores the need for enhanced regulation and transparency.

2025 Bankruptcy Tracker

Overview

In January 2025, PESP published a Bankruptcy Tracker that lists private equity-backed bankruptcies throughout 2024, highlighting the disproportionate number of private equity backed firms filing for bankruptcy protections compared to their non-private equity counterparts. The 2024 data highlights significant connections between the typical private equity buyout strategy and the increased risk of bankruptcy, as well as the effect suffered by suppliers, employees, and investors. 

PESP has updated that tracker to include all of the private equity-backed bankruptcies from 2025. While the overall number of PE-backed bankruptcies slowed slightly along with general economic trends, the industry continues to represent a disproportionate share of bankruptcies, particularly larger bankruptcies and those in certain key industries, such as manufacturing, healthcare, and consumer discretionary (companies that sell goods and services people want, but don’t necessarily need). 

Industry experts also note that the small decrease in numerical bankruptcies at private equity-backed firms could be related to a trend towards using out-of-court exchanges, also known as distressed exchanges, which allow companies to circumvent a formal bankruptcy process. Distressed exchanges are often accompanied by outcomes strikingly similar to those seen in bankruptcies, affecting creditors, workers, and consumers in profound ways. According to data compiled by S&P Global, a number of private equity-backed firms pursued distressed exchanges in 2025, including Blackstone-backed Packers Sanitation (Fortrex), Ares-backed Guitar Center, and TSG Consumer-backed Pabst Blue Ribbon. Allthreecompanies announced closures or layoffs in 2025. PESP analysis of this data showed that 41% of distressed exchanges tracked by S&P Global in 2025 were at private equity-backed firms. 

In addition to bankruptcies and distressed exchanges, a number of private equity backed companies also missed debt payments in 2025, a sign of serious distress that can lead to bankruptcy. At Home, the home decor superstore, missed debt payments in May 2025 before declaring bankruptcy in June and announcing the closure of dozens of stores with hundreds of layoffs in August. City Brewing Company, a contract brewing company owned by Charlesbank Capital Partners that makes many well known brands, missed debt payments in January 2025 before announcing layoffs in December. 

Private equity’s expansion into nearly every sector of the U.S. economy has far-reaching consequences. The heightened risk of bankruptcy threatens job security for workers, disrupts services for consumers, and creates ripple effects across local economies. Private equity’s growing presence raises questions about the sustainability of this financial model and its long-term impact on the broader economy. Understanding these dynamics is crucial for policymakers, industry stakeholders, and the public as they grapple with an increasingly privatized landscape.

Private equity tactics lead to higher risks of bankruptcy 

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 have demonstrated overreliance on cost-cutting measures and aggressive financial policies that have 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 it is acquiring rather than using its 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 much of their revenue toward servicing this debt, leaving them vulnerable to financial distress and bankruptcy.

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.

Within the first two weeks of 2026, private equity-backed retail giant Saks Fifth Avenue filed for bankruptcy with over $3 billion in debt, stiffing dozens of suppliers. Shortly after the bankruptcy, the company announced it would close most stores and all e-commerce. 

A recent Wall Street Journal article highlights the downfall of the famed company, citing the many risky private equity backed deals that led to a spiraling debt level with huge interest payments the company could not keep up with. The article also highlights the regular tactics that private equity executives use to cash in on the real estate under department stores and retailers.

The article notes how Richard Baker, CEO and founder of private Equity Firm NRDC, benefitted financially, even as some of his investments end in bankruptcy: 

“In 2005, he formed a private-equity firm to snap up retailers with valuable real estate. A memo he wrote that year listed his targets: Lord & Taylor, Canadian chain Hudson’s Bay, Saks, Germany’s Galeria Kaufhof, and Neiman Marcus. He would go on to buy them all. Each eventually filed for bankruptcy—though not all on his watch. Even though the companies failed, Baker often made money on the real estate.”

Investors who seek to mitigate adverse impacts to workers, financial risks, and reputational damage should adopt specific workforce principles that outline expectations for private equity firms across their portfolios. In 2024, Members of Congress reintroduced the Stop Wall Street Looting Act (SWSLA). The provisions of SWSLA provide comprehensive legislation to fundamentally reform the private equity industry and level the playing field by forcing private investment firms to take responsibility for the outcomes of companies they take over, empowering workers and protecting investors. In 2023, New Jersey amended its Worker Adjustment and Retraining Notification (WARN) statute by increasing the reporting and notice requirements and mandating severance payments in the event of a mass layoff. These changes provided added protections for workers facing mass layoffs at large companies. California passed a similar bill in 2025.

Continued high profile PE-backed bankruptcies in 2025

Forever 21

In March, Forever 21’s U.S. operations filed for bankruptcy, subsequently announcing the closure and liquidation of all domestic stores by May. The retailer was acquired in 2020 by a consortium including Authentic Brands Group, Simon Property Group, and Brookfield Property Partners. Authentic Brands Group itself is backed by a network of investors, notably the private equity firms CVC Capital Partners, HPS Investment Partners, and Leonard Green & Partners. In court filings, company executives attributed the bankruptcy to increasing competitive pressures from international e-commerce platforms such as Shein and Temu.  While broader challenges within the retail sector may have impaired the company’s ability to service its financial obligations, its $1.5 billion debt load likely played a decisive role in its collapse. As part of the liquidation process, Forever 21 is closing 355 stores and laying off approximately 9,200 employees across its U.S. locations.

Joann Fabrics

Joann, the fabric and craft store, filed for bankruptcy in March 2024, and it appeared that it would emerge without any major store closures or layoffs. But by January, Joann filed for bankruptcy a second time and announced that it would close and liquidate, laying off 19,000 employees. The company was owned by Leonard Green and Partners, a private equity firm with a history of aggressive debt practices that have contributed to the failure of a number of companies. Leonard Green and Partners contributed to the January bankruptcy of Prospect Medical Holdings and the December 2024 bankruptcy of The Container Store.

Prospect Medical Holdings

Prospect Medical Holdings is a safety net hospital system with 16 hospitals across California, Connecticut, Pennsylvania, and Rhode Island. It filed for bankruptcy in January of this year with over a billion dollars in liabilities. Although Leonard Green sold its stake in Prospect in 2021, its financial practices during its decade of ownership helped set the stage for collapse.

Throughout its ten-year ownership, Leonard Green and Prospect’s minority owners extracted approximately $658 million in fees and dividends from Prospect, in part by saddling it with debt and using the proceeds of the loans to pay Prospect’s ownership group. It collected this money out of Prospect even as many of its hospitals suffered deteriorating financial conditions and quality concerns – between FY 2015 and FY 2020, Leonard Green continued to profit while the hospital company took a $603 million cumulative comprehensive loss.

The Prospect bankruptcy is putting patient care and community health at risk. In Delaware County, Pennsylvania, two Prospect-owned hospitals are closing, leaving one of the state’s most populous counties with only two hospitals. These closures will leave Delaware County residents with significantly fewer emergency healthcare options. In response, State Rep. Dan Frankel said, “These hospitals were ransacked, robbed, and plundered for profit, and now their private equity owner gets to ride out of town, leaving communities with diminished access to health care and employment.”

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 1,000 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 2025, 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.