Bankruptcy Wave Builds as ATM Maker, Aerospace Supplier File (1)

At least three large firms filed for Chapter 11 bankruptcy protection in the US during a single 12-hour stretch, following up on the biggest rush in years.

Automated teller machine maker Diebold Nixdorf Inc., cancer-treatment firm GenesisCare and aerospace supplier Wesco Aircraft Holdings Inc. — which does business as Incora — all filed for bankruptcy overnight in the US. The petitions come barely two weeks after the bankruptcy system received the most filings from large firms for a two-day period since at least 2008, according to data compiled by Bloomberg.

The Chapter 11 filings allow the companies to keep operating, relatively free of harassment from creditors, while working on a plan to repay their debts. It’s a maneuver that’s become popular this year. At times, the first half of 2023 saw big bankruptcies pile up at the fastest pace since 2009.

This week’s spike underscores the corporate distress that’s built up in the global economy. Defaults are expected to increase markedly in the coming years, and nearly $300 billion of corporate bonds and loans currently trade at levels indicative of distress in the US, Bloomberg-compiled data show.

Different Paths

Each company’s path to insolvency court is slightly different — Diebold, for example, has seen disappointing ATM sales and earnings. Incora has had major supply chain problems. GenesisCare struggled to integrate a major acquisition.

What they all have in common: debt. All three have balance sheets burdened by obligations that can’t be repaid without the help of a federal judge, especially during a period of fast-rising interest rates.

Companies have seen interest costs spike over the past year-plus amid some of the largest monetary-policy tightenings in decades as inflation surged. While some central banks have for now concluded their cycles of increased interest rates, or have hinted they may soon do so, a slowing global economy risks adding to the pressures facing borrowers with debt-refinancing challenges.

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To contact the reporters on this story:
Ameya Karve in Singapore at akarve@bloomberg.net;
Jeremy Hill in New York at jhill273@bloomberg.net

To contact the editors responsible for this story:
Catherine Bosley at cbosley1@bloomberg.net

Kevin Kingsbury, Allan Lopez

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