The Biggest 2021 Bankruptcies and Looking Ahead for 2022

Although bankruptcy trends in 2021 calmed down from the worst of the pandemic during 2020, large public company bankruptcy filings continued to have a substantial impact. Among the largest bankruptcies, the 96%-accurate FRISK® score reliably forewarned CreditRiskMonitor® subscribers of the financial risk they faced with ample notice. In this group of the largest bankruptcies from 2021, total liabilities approached $77 billion, which delivered material losses to creditors and disruptions to global supply chains.

CreditRiskMonitor is a B2B financial risk analysis platform designed for credit, supply chain, and other risk managers. Our service empowers clients with industry-leading, proprietary bankruptcy models including our 96%-accurate FRISK® score for public companies and 80+%-accurate PAYCE® score for private companies, and the underlying data required for efficient, effective financial risk decision-making. Thousands of corporations worldwide – including nearly 40% of the Fortune 1000 – rely on our expertise to help them stay ahead of financial risk quickly, accurately, and cost-effectively.

Post-Mortem Review

In 2021, the highest-profile bankruptcy filings came from industries such as retail, airlines, construction, and, most frequently, the oil & gas operations and oil well services & equipment. The weakness in the broader economy negatively affected these cyclicals. Enter the FRISK® score, which accurately identified all major public company failures in 2021. With 100% reliability, the FRISK® score allowed our clientele to proactively manage their biggest dollar risk exposures early and effectively. As a baseline, we have correctly identified 96% of public company bankruptcies at least 3 months beforehand.

The FRISK® score assesses bankruptcy risk, taking into consideration: 

  • stock market performance,
  • financial statement ratios, such as those found in the Altman Z’’-Score,
  • bond agency ratings from Moody’s, Fitch, and DBRS Morningstar, and 
  • aggregated researched click patterns of our subscriber base

This final factor, representing the hivemind sentiment of key credit decision-makers at more than 35% of the Fortune 1000 plus thousands of other large companies worldwide, is a key leading signal that updates daily and significantly enhances the risk categorization of financially distressed companies. A FRISK® score of "5" or less on the "1" (highest risk)-to-"10" (lowest risk) scale indicates material bankruptcy risk that needs to be monitored closely.

For the companies listed below, rocky fiscal performance and swelling debt ultimately necessitated bankruptcy. If any of the 19 companies below are directly in business with you or have dealings with a key counterparty of yours, here were their FRISK® scores directly before filing:

Company Total Liabilities ($) Industry Country FRISK® Score Bankruptcy Date
Steinhoff International Holdings NV 20,495,940 Retail (Specialty) South Africa 3 Oct. 5
Garuda Indonesia (Persero) Tbk PT 13,027,028 Airline Indonesia 2 Dec. 9
Abengoa SA 8,562,438 Construction Services Spain 3 Feb. 22
Seadrill Ltd.Seadrill Ltd. 7,397,000 Oil Well Services & Equipment Bermuda 1 Feb. 10
Nordic Aviation Capital A/S 6,965,890 Rental & Leasing Denmark 3 Dec. 17
GTT Communications Inc. 4,542,200 Communications Services U.S.A. 1 Oct. 31
Washington Prime Group Inc. 3,579,083 Real Estate Operations U.S.A. 1 June 13
Jiangsu Dewei Advanced Materials Co., Ltd. 2,588,032 Chemicals - Plastics & Rubber China 3 Dec. 27
Just Energy Group Inc. 1,720,962 Electric Utilities Canada 3 Mar. 9
Prosafe SE 1,609,500 Oil Well Services & Equipment Norway 1 Apr. 30
Boart Longyear Group Ltd. 1,182,072  Oil Well Services & Equipment Australia 1 Aug. 17
Grupo Posadas SAB de CV 916,268 Hotels & Motels Mexico 1 Oct. 26
HighPoint Resources Corporation 903,320 Oil & Gas Operations U.S.A. 1 Mar. 14
KrisEnergy Ltd. 831,314  Oil & Gas Operations Singapore 2 June 4
Basic Energy Services Inc. 548,951  Oil Well Services & Equipment U.S.A. 1 Aug. 17
Sequential Brands Group Inc. 493,330  Apparel/Accessories U.S.A. 3 Aug. 31
Hindusthan National Glass & Industries 463,412  Containers & Packaging India 3 Oct. 21
Sundance Energy Inc. 428,822  Oil & Gas Operations U.S.A. 3 Mar. 9
Polarcus Ltd. 404,483  Oil Well Services & Equipment U.A.E. 1 Feb. 8

Total liabilities are sourced from the last fiscal period prior to the bankruptcy filing and calculated in USD ($) currency.

Predicting Bankruptcy in 2022

The 2022 outlook as it relates to bankruptcy is, in a word, bleak. Nonfinancial corporate debt stands at all-time highs. Central banks continue to signal monetary tightness, and with interest rates almost assuredly going up before EOY, borrowing costs are also expected to rise. Companies that are dependent on variable-rate bank loans, carrying near-term maturity walls, and/or are dealing with underlying financial stress will face a much bigger challenge in avoiding bankruptcy than in 2021. Moreover, the FRISK® score’s cumulative list of high-risk public companies has grown by 30% and 10% for the U.S. and worldwide, respectively, since November of 2021.

COVID-19 Chart

If one chooses a worldwide view, more than 1,000 company FRISK® scores fell into the red zone in the last three months. Altman Z’’-scores, by contrast, remain unchanged during that same stretch. This points out a keen advantage enjoyed by FRISK® score disciples: divergence comes from unique data components of stock market performance and subscriber crowdsourcing, which update the FRISK® score daily instead of quarterly. CreditRiskMonitor® subscribers have found that they can take advantage of this asymmetric information to make more informed business decisions to deliver better outcomes, i.e. moving more quickly to adjust credit terms or sourcing products/services from alternative suppliers.

The list below shows a handful of the most distressed companies:

Company Total Liabilities ($) Industry FRISK® Score High Risk Report
Abraxas Petroleum Corporation 245,455 Oil & Gas Operations 1 Download
Team, Inc. 609,994 Business Services 1 Download
China Evergrande Group 255,649,420 Construction Services 1 Download
Cineworld Group plc 10,676,400 Motion Pictures 2 Download
  • Abraxas Petroleum Corporation, an oil and gas exploration and production company, after suffering from a string of net losses and poor liquidity, announced a comprehensive restructuring on Jan. 3, 2022.
  • Team Inc., a provider of integrated, digitally-enabled asset performance assurance and optimization solutions, disclosed on Jan. 18, 2022 that it had entered into a supplemental indenture amendment. The disclosure included PIK interest payments, a major red flag.
  • China Evergrande Group, one of China’s largest property developers, defaulted on its debt last year and is seeking to restructure. However, offshore bondholders claim that they have had “no substantive engagement with the firm over its restructuring plans despite the firm's repeated assurances” and have retained Kirkland & Ellis and Moelis as restructuring advisers.
  • Cineworld Group plc, an international movie theater chain, is heavily indebted with $8.9 billion in total debt and recently lost a court ruling with Cineplex totaling $990 million, which more than twice exceeds total cash and short-term investments. In the event the appeal falls through, Cineworld could end in corporate failure. 

Bottom Line

Although 2021 bankruptcies were relatively placid compared to the damage incurred during the peak of the 2020 pandemic, cumulative liabilities still amounted to $77 billion among the largest public companies. With the macroeconomic picture rolling over in the early part of 2022, risk professionals must promptly review their portfolios for building bankruptcy risk. More and more leveraged companies worldwide are becoming risky. 

The lists above are but a sampling of real-life examples where bankruptcy could be the ultimate outcome, one of which is already ending with winding up proceedings. Not sure where to start? Contact CreditRiskMonitor to see how we can help you stay ahead of the 2022 bankruptcy spike.

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