8 Popular Companies That Went Bankrupt in 2024

22/06/2024

Red Lobster

The news earlier this year that Red Lobster was filing for bankruptcy may have made you curious about how your other favorite businesses are doing in 2024. After all, we’ve heard plenty of reports of the impact of inflation and general struggles for parts of the economy.

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While many people equate bankruptcy with going out of business, that’s not always the case. In fact, it’s a move that can help businesses come back even stronger.

Red Lobster filed for Chapter 11 bankruptcy, which is a move that can help it recover. This type of bankruptcy allows organizations to restructure, create debt-payment plans and stay operational.

However, it’s not always successful. In fact, according to InCharge Debt Solutions, “Only about 10% of Chapter 11 filings result in success; far more often, they end up in Chapter 7 straight bankruptcy, in which the company closes and its assets are sold to pay back secured creditors.”

Here’s a look at the popular companies that have gone bankrupt in 2024 (so far).

1. Red Lobster

Some diners still find it hard to believe that the world’s largest seafood restaurant chain filed for bankruptcy. According to CNN, “Red Lobster said that it had more than $1 billion in debt and less than $30 million in cash on hand.”

More important to diners is that Red Lobster continues to close locations. That means the chain that brought affordable shrimp and lobster to families is now leaving many communities across the United States.

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2. iSun

According to Intellizence, iSun filed for Chapter 11 bankruptcy this month. iSun is a provider of solar energy systems — and its bankruptcy has some analysts concerned about the health of the industry overall.

Higher interest rates may have played a part in the challenges for iSun. After all, those higher rates hurt the company and made customers less likely to finance the purchase of iSun’s products.

3. LaVie Care Centers

One of the largest operators of skilled nursing facilities in the U.S. filed for Chapter 11 bankruptcy this month. According to Becker’s Hospital Review, “Atlanta-based LaVie Care Centers files for Chapter 11 bankruptcy, citing high labor costs and pandemic impact.”

LaVie operates dozens of nursing homes and assisted living facilities, under multiple names, in five states with more than 3,500 employees.

4. Takeoff Technologies

The name might not suggest it, but Takeoff Technologies is part of the e-commerce industry. It filed for Chapter 11 bankruptcy this spring.

The grocery e-commerce fulfillment provider’s bankruptcy comes amid challenges in the industry. According to Grocery Dive, “While grocery e-commerce — and demand for service providers to help streamline online order fulfillment — quickly rose during the pandemic, grocers have now pivoted their attention to retaining price-sensitive shoppers and grappling with the fading sales boosts they had received from the pandemic and inflation.”

5. rue21

Many retailers have struggled lately with inflation making shoppers uneasy and stiff competition from online options. That’s the case with rue21 — the teen fashion retailer filed for Chapter 11 bankruptcy and announced plans to close all its stores.

This is not the first trouble for rue21. The retailer has filed for bankruptcy twice before.

6. Joann

Fabric and crafts store Joann filed for bankruptcy in March. However, its stores are not expected to close.

Joann has a big footprint in the U.S. — about 850 stores in 49 states. According to NBC News, “The company went public in 2021 as the pandemic lingered and during an apparent boom in at-home, do-it-yourself consumer activity.”

7. Express

Here’s the story of another struggling retailer. Express, which includes its namesake banner, Bonobos and UpWest, filed for Chapter 11 bankruptcy and announced plans to close dozens of shops.

According to CNBC, “The longtime mall retailer has failed to stay on trend and keep up with shifting consumer demand, which has led sales to plummet in recent years.”

One factor is likely the pandemic. As more workers shifted to remote opportunities, they spent less on formal and casual workwear. In addition, Express has struggled with costs for their mall locations, many of which have seen reduced foot traffic.

8. KidKraft

Toy brands and retailers have been facing recent challenges. Dips in sales have led some companies to make changes.

KidKraft, a toy company, filed for Chapter 11 bankruptcy and said it would sell its U.S. and Canadian assets to Backyard Products. It has been in business for more than 50 years.

In a statement, CEO Geoffrey Walker said, “We are confident that with the strong support of new ownership, KidKraft will be on track to continue inspiring imaginative play experiences through our impressive range of high-quality products.”

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