The 2025 Chapter 11 Surge: Decade-High Filings

Introduction

The 2025 Chapter 11 wave was the highest-volume year for U.S. corporate bankruptcy filings since the post-financial-crisis cycle, and the shape of the surge tells a more interesting story than the headline numbers. Filings did not climb steadily through the year. They concentrated in specific months, in specific sectors, and in a specific group of bankruptcy venues that have replaced Delaware as the dominant jurisdiction for large corporate restructurings.

This article walks through the 2025 filings data:

The numbers come from the U.S. Courts statistical reports, Cornerstone Research's midyear 2025 update, Epiq Global, and BankruptcyData tracking.

Commercial Chapter 11 filings reached 7,940 in calendar year 2025, up just 1% from the 7,893 filings in 2024. That modest year-over-year increase masks what happened underneath. Total bankruptcy filings across all chapters rose 11% to 565,759 from 508,953 in 2024. Subchapter V elections, the small-business reorganization track, jumped 11% to 2,446 from 2,202. Larger filings (companies with over $100 million in assets) increased to 117 in the trailing twelve months ending mid-2025, up from 113 the year before, which is 44% above the 2005-2024 average of 81 large filings per year.

The most striking data point is the mega-filing volume. Cornerstone Research counted 17 mega bankruptcies (companies filing with over $1 billion in reported assets) in the first half of 2025 alone. That was the highest half-year total since the COVID-19 wave in 2020 and triple the typical pre-pandemic pace of roughly 6 mega filings per half-year. The trailing-twelve-month count reached 32 mega bankruptcies, up from 24 in the prior period.

The semiannual large-corporate bankruptcy figure of 59 filings in H1 2025 was nearly 50% above the 41-filing historical semiannual average between 2005 and H1 2025. In context, the only periods that exceeded the 2025 H1 figure in the past two decades were 2009 (the GFC trough) and 2020 (the COVID quarter). Mid-2025 activity was running at near-recession levels even though GDP expanded.

Filings did not rise gradually through 2025. The data shows a sharp acceleration in mid-year, a peak in summer, and elevated activity through Q4. The cleanest picture comes from month-over-month comparisons against 2024:

July 2025 was the inflection point. Commercial Chapter 11 filings hit 911 that month, a 78% jump from the 512 filings in July 2024. The cluster of filings in July reflected several large cases queued through Q2 that hit the docket in coordinated fashion, including Joann's pivot from going-concern to liquidation, multiple commercial real estate filings, and a wave of consumer-goods bankruptcies tied to the March 2025 tariff expansion.

The surge slowed in late Q3 but did not reverse. The 592 December 2025 filings, while a milder 6% above prior year, brought the full-year total to its decade high. By contrast, the 2024 December figure of 556 had marked what restructuring advisors at the time considered a peak. The 2025 calendar effectively pushed activity to a new ceiling.

Delaware's three-decade default position

For more than thirty years, the District of Delaware was the default venue for large corporate bankruptcy filings. Delaware's longstanding dominance came from a combination of factors: most U.S. public companies are incorporated there, the bankruptcy bench has deep specialization, and the local rules have been refined for complex cases. As recently as 2018, Delaware accounted for the majority of all large Chapter 11 filings.

How Texas overtook Delaware in 2025

That dominance broke in 2025. According to BankruptcyData figures cited by Bloomberg Law, Dallas and Houston combined drew 33 bankruptcies with assets above $100 million through Q3 2025, versus Delaware's 25. The Northern District of Texas alone, a venue that had been a peripheral jurisdiction for large cases, recorded 9 cases with $100M+ assets, overtaking the Southern District of New York (7) and New Jersey (5). Cornerstone Research's data on the trailing twelve months shows Delaware still leading single-district share at roughly 40%, with the Southern District of Texas at 24% and other districts splitting the remainder.

Bankruptcy Venue

The federal bankruptcy court district where a Chapter 11 case is filed. Under 28 U.S.C. § 1408, a debtor can file in any district where it has its principal place of business, principal assets, or where an affiliated entity has filed. The flexibility of the venue rules creates "forum shopping" incentives that have driven the historical concentration of large cases in Delaware and the Southern District of Texas.

What's driving the shift: complex-case panels and predictability

The drivers behind the venue shift are concrete. The Southern District of Texas built a complex-case panel of judges with deep restructuring experience and predictable case-handling rules. The Northern District of Texas in 2024 added complex-case procedures explicitly modeled on the SDTX program. Texas venues offer faster confirmation timelines, more predictable rulings on contested DIP and sale issues, and a deep bench of local counsel familiar with major restructuring matters. The Texas Two-Step controversy (covered separately in this section) provided a high-profile counter-narrative, but the underlying pattern is straightforward: debtors and their advisors increasingly choose Texas because they expect a faster, more predictable case.

Beyond filing volume, 2025 continued a multi-year trend toward shorter Chapter 11 cases. According to Fitch's analysis of recent filings, median case duration runs:

The shift toward prepackaged and prearranged structures kept accelerating in 2025. Studies tracking public-company filings show prepackaged cases growing from roughly 6% of filings in 2003 to over 42% in 2017, and the 2025 data extends that trajectory. By mid-2025, well over half of large public-company Chapter 11 filings were either prepackaged or prearranged, with traditional contested cases the minority.

The compression has practical implications for advisory mandates. A traditional eleven-month case generates roughly two to three times the monthly fee revenue of a prepackaged two-month case for the lead financial advisor, but the per-case fee tends to be much higher because of the complexity. A prepackaged case generates lower total fees but allows advisors to run more mandates per partner per year. The result is that 2025 league tables increasingly reward firms with broad mandate flow (Houlihan Lokey, PJT) over firms that depend on a small number of long-running marquee cases.

The 2025 filings mix shifted toward sectors with structural headwinds. Cornerstone Research's midyear 2025 data shows manufacturing carrying the highest share of bankruptcy filings across all industries. Among manufacturing mega bankruptcies, 67% cited the regulatory, legal, and policy landscape as a key driver of financial distress, with renewable-energy policy and international trade and tariffs the most common specific factors.

Beyond manufacturing, three other sectors dominated:

The combined manufacturing, real estate, and consumer concentration accounted for roughly 80% of 2025 large Chapter 11 activity. That concentration matters because it tells restructuring desks where to staff and where to expect near-term mandate flow. PJT, for example, built out its commercial real estate restructuring practice in 2024 and 2025 in anticipation of the wave that ultimately arrived. Houlihan Lokey expanded its consumer-and-retail bench. Both decisions look prescient in light of the actual 2025 mix.

The 11% jump in Subchapter V elections to 2,446 in 2025 deserves its own attention because it captures distress in the segment of the economy that rarely makes headlines but represents most U.S. business activity. Subchapter V was created as a permanent program under the Small Business Reorganization Act of 2019 (effective February 19, 2020); the COVID-era temporary elevated debt limit of $7.5 million expired on June 21, 2024, reverting the cap to $3,024,725 under the standard inflation-adjusted threshold for streamlined Chapter 11. The category covers small-business operators that historically would have liquidated under Chapter 7 or shut down without filing at all.

The Subchapter V data tells a complementary story to the mega-bankruptcy data. While Wall Street advisors track mega filings, the broader economy is reflected in the small-business reorganization track. Three sectors drove the 2025 Subchapter V surge: independent restaurants (working through margin compression and labor cost pressures), small commercial real estate operators (holding properties through the maturity wall), and small medical practices (caught between rising input costs and stagnant reimbursement). The fact that Subchapter V volumes rose at a faster rate than commercial Chapter 11 filings suggests distress is broader-based than the mega-filing data alone would indicate.

A meaningful structural shift in 2025 was the rising share of bankruptcy filings from companies whose debt sits in private credit rather than public bond and broadly syndicated loan markets. Through the 2018-2022 wave, the typical large bankruptcy involved publicly traded debt held by mutual funds, CLOs, and BDCs. By 2025, a growing share of mega filings involved companies funded primarily by direct lenders, including First Brands Group (where major direct lenders held senior positions), several middle-market healthcare operators, and a number of consumer goods companies funded through private credit syndicates.

The implications are concrete. Private-credit-funded filings tend to involve smaller numbers of more concentrated creditors, fewer trading-driven creditor groups, and different DIP financing dynamics. Cooperation among five to ten direct lenders looks different from cooperation among hundreds of CLO and mutual fund holders of broadly syndicated loans. The 2025 cases provide the first sustained dataset on how private-credit-funded restructurings actually work, and the playbook is still being written.

Behind the headline venue shift is a concrete decision tree that debtor-side advisors run for every large filing. The decision sits at the intersection of legal strategy, judge selection, complexity considerations, and forum reputation, and it has become more nuanced post-Judge Jones. Understanding this decision is one of the more useful pieces of practical knowledge for an Rx interview.

The Judge Jones resignation in October 2023 changed the SDTX picture significantly. Jones had handled approximately 17% of all complex bankruptcy cases with over $1 billion in liabilities since January 2020, often in cases where his rulings on contested DIP, plan, and sale issues were treated as roughly predictable by debtor-side advisors. After his resignation, judge assignment in SDTX became less concentrated, and several debtors that would have chosen SDTX in 2022 selected other venues in 2024-2025. Yet SDTX still drew approximately 24% of large-case volume through 2025, indicating that the venue's institutional advantages outlasted any single judge.

The 2025 surge was not purely a U.S. phenomenon, although the magnitude was largest domestically. UK insolvency filings tracked through the Insolvency Service rose roughly 8% in 2025, with retail and hospitality leading. Germany recorded its highest corporate insolvency total since 2015, driven by manufacturing distress tied to energy costs and Chinese competition. France saw a measurable increase in safeguard procedures (the closest French analog to Chapter 11), particularly in consumer-facing sectors hit by reduced household spending power.

Several 2025 U.S. mega cases involved cross-border dimensions. A handful of European-headquartered industrial companies with U.S. operations chose Chapter 11 as their primary restructuring venue, using parallel proceedings in their home jurisdictions to capture U.S. asset value through the Section 1521 recognition framework under Chapter 15. The pattern reflects the broader market reality that the U.S. Chapter 11 toolkit (Section 363 sales, DIP financing, plan confirmation through cramdown) remains the most flexible restructuring system globally, drawing in cross-border filers even when their primary distress occurred outside the U.S.

The volume and concentration of the 2025 wave produced a busy year for the major restructuring practices. League tables ranked Houlihan Lokey, PJT Partners, Lazard, Evercore, and Moelis as the top five debtor-side advisors by mandate count, with Centerview and Guggenheim picking up significant creditor-side roles. The 2025 fee pool for the major Rx desks ran an estimated 30% to 40% above 2024 levels, with the largest single-case fees coming from the First Brands Group, Rite Aid (second filing), and Forever 21 mandates.

The compression toward prepackaged and prearranged cases means that 2025 produced fewer multi-quarter "war stories" and more six-to-eight-week sprints. Junior bankers in Rx in 2025 saw a higher number of distinct mandates than juniors in prior cycles, with deeper exposure to RSA negotiation, DIP financing structuring, and creditor-committee work. That is generally a positive for talent development, although the trade-off is that the marquee multi-year cases (Lehman, Caesars, PG&E, Purdue) that produced earlier generations of senior bankers are increasingly rare.

For interview prep, the 2025 filings data set up several technical questions worth knowing cold: total commercial filings (7,940), mega filings (32 trailing twelve months), the 78% July spike, the venue shift to Texas (Dallas+Houston 33 versus Delaware 25), and the case-length distribution (11, 4, 2 months across traditional, prearranged, and prepackaged). Together those data points let a candidate sound like they actually read the 2025 tape rather than a single end-of-year newsletter.

A subtler point worth noting: the 117 large-corporate filings in the trailing twelve months ending mid-2025 represent only the names that actually filed for bankruptcy. Roughly an equal number of comparably distressed companies executed out-of-court restructurings via LMTs, distressed exchange offers, or amend-and-extend transactions during the same window. Counting both channels, the universe of mandates that fed major Rx desks in 2025 likely exceeded 220 distinct companies, which is the largest pool of work for U.S. restructuring practices since at least 2009. The next article in this section drills into the four cases (First Brands, Rite Aid, Forever 21, Joann) that defined the year.