Renowned companies are now declaring bankruptcy, affecting various sectors. From dining establishments such as Boston Market and Sticky’s Finger Joint to retailers like Sears and Bed Bath & Beyond, many could not fulfill their financial obligations in 2024. But where did most of these cases arise? According to the Administrative Office of the U.S. Courts for the year ending March 31, 2025, Texas was a notable leader with 1,427 Chapter 11 filings across its four federal districts. The Northern District accounted for 444 companies, the East had 98, the South saw 738, and Western Texas had 147. Delaware came next with 1,242 Chapter 11 cases.
New York’s courts recorded a total of 994 corporate bankruptcies. The Eastern District led with 528 filings, while the South had 409. In contrast, the Northern and Western districts had significantly fewer cases, with only 30 and 27 filings, respectively. Further south, Florida courts processed 811 Chapter 11 petitions during the same timeframe. More than half of these — 452 — were from the Middle District. On the West Coast, California’s four districts combined for 773 total filings, with the Central District (Los Angeles) alone processing 411 petitions, followed by 237 in the Northern District. The Eastern and Southern districts added another 90 and 35 filings, respectively.
A court-enabled system in Texas and Delaware
The high bankruptcy rates in Texas and Delaware can be attributed to their courts actively attracting out-of-state debtors. In Houston, all “complex” cases — companies owing at least $200 million — are assigned to two judges, Christopher Lopez and Alfredo Perez, according to Reuters. The system is so accommodating that Sorrento Therapeutics was permitted by Judge Lopez to maintain its case in Houston, even though its only Texas “office” was a P.O. box opened 10 hours before the March 2024 petition. Consequently, large companies outside Texas are aware they can leverage a predictable panel to their advantage.
Delaware employs a similar court-enabled bankruptcy filing system. When a company files for Chapter 11, the court adheres to a strict schedule to avoid delays. At the initial meeting, the judge outlines a timeline; participants have five days to exchange case details, knowing in advance when to submit evidence, written arguments, and the reorganization plan.
Each week, the court allocates time to address routine requests like seeking quick orders, checking in with the U.S. Trustee’s office, or approving reorganization plans — minimizing time wasted on negotiating dates. Companies must also submit the complete list of documents they plan to present at least two business days before the first hearing. It’s no surprise that 50 of the 113 large-company Chapter 11 cases filed in the U.S. from July 2023 through June 2024 were filed in Delaware, according to Cornerstone midyear 2024 update.
Real estate issues in New York
From April 1, 2024, to March 31, 2025, the Administrative Office of the U.S. Courts recorded 994 business bankruptcy filings in New York. At least six significant cases in the Southern District involve landlord companies such as Broadway Realty I Co., LLC (managing thousands of rent-stabilized apartments), 560 Seventh Avenue Owner Primary LLC (owner of the Margaritaville Times Square hotel), Times Square JV LLC, and Urban Commons 2 West LLC. These landlords are struggling because tenants aren’t paying rent on mostly empty or underutilized buildings. For instance, CommercialEdge’s May 2025 report indicates that Manhattan has an office vacancy rate of 16.2%, the lowest in the Northeast.
This makes sense considering that only 57% of office workers come in on an average weekday, as reported by the Partnership of NYC in March 2025. With so few people in those offices, vacant spaces accumulate quickly. Concurrently, the Federal Reserve‘s interest rates of 5.25% to 5.5% as of March 2024 have increased costs on variable‐rate mortgages, further straining owners’ budgets. When owners can’t meet these higher payments, bankruptcy court becomes their only option to halt foreclosure or modify debt — just as the Margaritaville hotel and Broadway Realty did. This situation was evident on May 30, 2024, when a court approved WeWork’s plan to renegotiate 190 Manhattan leases as those rent costs became unsustainable.
Economic pressures in California and Florida
California is experiencing an increase in business bankruptcies for two main reasons. First, property cash flow is deteriorating. ATTOM reported 187 commercial foreclosures in March 2024 — a 405% rise from March 2023, the highest in the nation. San Francisco’s downtown office vacancy is now around 40%, according to JLL figures cited by the San Francisco Chronicle in October 2024. Landlords facing higher mortgage rates are filing Chapter 11 to stop foreclosures or relinquish properties. Secondly, tech funding has dwindled. PitchBook-NVCA data shows U.S. venture deals fell 32% from Q2 to Q3 2024, leaving cash-strapped startups without sufficient runway. The impact is evident; genetic-testing company 23andMe filed for bankruptcy in March 2025 following a data breach that affected 7 million users and declining kit sales.
Florida is experiencing numerous hotel and restaurant bankruptcies. Central Florida’s local media counts over two dozen 2024 restaurant closures and Chapter 11 filings, attributing them to “rising food, alcohol, labor, and supply costs.” Some of these factors contributed to Orlando-based Red Lobster filing Chapter 11; it reported an $11 million loss from its “Endless Shrimp” promotion. In Q1 2024, JLL U.S. Hotel Capital Markets research documented that hotel CMBS coupons averaged 7.7%, while floating-rate loans were about 8.3%. Additionally, Insurance Journal, citing AM Best’s May 2024 special report, noted that commercial property insurance premiums in Florida increased 125% over five years and another 27% in 2023, leaving less money to cover slow seasons.
“`
