Business Bankruptcies Surge to Highest Level Since 2010

The U.S. economy is seeing an unprecedented rise in bankruptcy filings not experienced since the aftermath of the Great Recession in 2010. A confluence of rising operational costs, fierce competition from international companies and the relentless march of online commerce has left many companies, particularly consumer-facing ones, struggling to stay afloat.

The Administrative Office of the U.S. Courts reported that in the year ending June 30, 2025, business-related bankruptcy filings increased by 4.5 percent, climbing from 22,060 to 23,043 cases. In addition, S&P Global stated that 371 sizable U.S. companies sought bankruptcy protection in the first six months of 2025, compared with 335 during the same period in 2024. June 2025 alone saw 63 major filings.

Retailers and hospitality providers have been particularly hard hit. Longstanding brands have struggled to adapt to elevated expenses, such as costs of goods, wages and rent, while facing mounting pressure from global competition and e-commerce companies that are able to undercut pricing and margins. 

The following well-known brands have recently sought shelter from creditors in bankruptcy court:

• Rite Aid — After first entering bankruptcy protection in October 2023, the national pharmacy chain filed a second Chapter 11 in May 2025 when additional exit financing only increased its debt. The new petition listed assets and liabilities of $1 billion to $10 billion. 
• Bertucci’s — The Italian cuisine restaurant chain entered Chapter 11 for the third time in seven years in April 2025. After years of waning consumer interest and relentless cost inflation for ingredients and wages, Bertucci’s shuttered over half its locations. 
• Hooters — The restaurant chain filed for bankruptcy protection in March 2025 under a crushing $376 million debt load pegged to labor and food inflation, evolving customer preferences and slowing recovery in the sports-bar segment. There are plans to spin off all of its locations.
• Claire’s — This young-adult fashion stalwart was forced into Chapter 11 bankruptcy in August 2025. Lower foot traffic in shopping centers, shifting consumer tastes, persistent debt, and trade tariffs combined to erode its business.
• Forever 21 — Another casualty in the fast fashion sector, Forever 21 filed for bankruptcy in March 2025, citing rising operating costs and intensified rivalry from international players like Shein and Temu. The company is expected to shutter all its U.S. stores by 2025’s end.

For consumer-facing businesses, these events underscore the need for early legal counsel in considering restructuring routes. An experienced Chapter 11 attorney can help such companies with a plan that protects vital assets and revenue streams and with reviewing important contracts for provisions triggered by insolvency. Proactive engagement with financial advisers can also make the difference in a struggling enterprise emerging from bankruptcy with a chance to rebuild.

The Law Offices of Michael Jay Berger in Beverly Hills is one of Southern California’s most experienced Chapter 11 bankruptcy law firms, with 12 locations across the region. If your business is facing overwhelming debt, please call 310-271-6223 or contact us online to schedule a consultation.