2024 Private Equity Bankruptcies

In 2024, private equity-backed companies were overrepresented in U.S. corporate bankruptcies, particularly among large filings with liabilities exceeding $500 million. This trend is attributed to the private equity model's preference for short-term profit and the use of leveraged buyouts, which saddle companies with unsustainable debt. These bankruptcies led to at least 65,850 layoffs and significant disruptions in the healthcare and consumer sectors. The report also highlights the use of 'distressed exchanges' as an out-of-court restructuring tool and notes that private equity firms often remain profitable through management fees and dividends despite the collapse of their portfolio companies.

• Private equity firms were involved in a disproportionate share of U.S. corporate bankruptcies in 2024, accounting for 56% (27 of 48) of large bankruptcies with liabilities of $500 million or more and 11% (75 of 697) of all corporate bankruptcies, despite representing only 6.5% of the U.S. economy.
• The impact of private equity ownership is particularly severe in the healthcare sector, where private equity-backed companies accounted for 21% of all bankruptcies in 2024 and 7 of the 8 largest healthcare-related bankruptcies.
• Bankruptcies linked to private equity in 2024 resulted in at least 65,850 layoffs across the United States, though this figure is likely an undercount as it excludes unreported closures and layoffs occurring prior to filings.
• Leveraged buyouts are identified as a critical driver of financial instability, as private equity firms use debt secured by the acquired company to finance purchases, forcing companies to prioritize debt servicing over innovation and workforce development.
• Private equity firms often avoid the financial losses of their portfolio companies' bankruptcies by exiting investments early or profiting from management fees and dividends. For example, Cerberus Capital Management reportedly made $800 million during its decade of ownership of Steward Health Care, including a $111 million dividend paid around the time of its exit.
• Beyond formal bankruptcy, private equity-owned companies utilized 'distressed exchanges'—out-of-court debt swaps—at least 24 times in 2024 to reduce debt burdens, a process that often lacks public scrutiny and may merely delay eventual bankruptcy.
• Future risk remains high, as private equity portfolio companies represented 73% (183 out of 240) of Moodys most speculative companies (rated B3 negative and lower) as of October 2024.

APA

Private Equity Stakeholder Project (2025). 2024 Private Equity Bankruptcies. https://pestakeholder.org/reports/2024-private-equity-bankruptcies/

Chicago

Private Equity Stakeholder Project. 2024 Private Equity Bankruptcies. 2025. https://pestakeholder.org/reports/2024-private-equity-bankruptcies/.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=2024 Private Equity Bankruptcies |date=12 February 2025 |url=https://pestakeholder.org/reports/2024-private-equity-bankruptcies/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderproject20252024, author = {{Private Equity Stakeholder Project}}, title = {{2024 Private Equity Bankruptcies}}, institution = {Private Equity Stakeholder Project}, year = {2025}, month = feb, url = {https://pestakeholder.org/reports/2024-private-equity-bankruptcies/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }