Private Equity Tied to Over Half of Biggest U.S. Bankruptcies in 2025

More than half of the largest U.S. bankruptcies in 2025 had one thing in common: private equity. Out of 35 companies with over $1 billion in liabilities, 19 were backed by PE firms, raising fresh questions about how these businesses were financed and managed before they collapsed.

It’s not a new pattern, but it’s becoming harder to ignore.

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Where the Impact Is Most Visible

This isn’t happening in one corner of the market.

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Retail, manufacturing, and healthcare keep coming up — sectors where companies were already under pressure.

Retail stands out in particular. Several of the biggest failures were tied to brands trying to manage rising costs, shifting demand, and heavy debt all at once. The concentration suggests that certain business models are more exposed to financial pressure under changing market conditions.

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What’s Driving the Trend

A lot of these companies are built on borrowed money.

That works when sales are growing and cash is coming in. But once things slow down, the bills don’t stop. Interest still has to be paid, and the debt still needs to be serviced. That’s where the pressure builds. Companies start cutting prices to move inventory, margins shrink, and cash gets tighter.

Before filing, some try to buy time through restructuring or distressed exchanges. But if the underlying business isn’t improving, those moves don’t fix the problem, they just push it forward.

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Real-World Consequences

The impact goes beyond the companies themselves.

These bankruptcies have been tied to tens of thousands of job losses, hitting workers across multiple industries.

Closures also ripple into local economies. You have fewer jobs, less spending, and in some cases reduced access to basic services, including healthcare.

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Early Signs in 2026

That same pressure is already carrying into 2026.

Bankruptcies involving names like Saks Fifth Avenue and Eddie Bauer show this isn’t just a one-off. It’s the same story playing out again: companies stretched too far, holding on for as long as they can, then breaking.

And if that’s already happening this early, it suggests there’s more still working its way through.

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Final Notes

The pattern is hard to ignore.

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Private equity keeps showing up in a large share of the biggest bankruptcies, and with similar cases already appearing in 2026, it doesn’t look like it’s slowing down.

For traders and investors, this is the kind of trend worth paying attention to as it develops.

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