Several big-name companies are finding themselves in a struggle to survive in the economic downturn, suggesting a wave of bankruptcies akin to one sparked by the Lehman collapse could be expected in the upcoming months.
Reuters reports, "companies in a range of businesses, including hair salons, restaurants, renewable energy, and the paper industry, have tumbled into Chapter 11 in the past few months." The effects of the struggling economy also threaten "companies in industries as diverse as shipping, tourism, media, energy and real estate."
Industry experts say predicting a wave of bankruptcies is "no easy task." The largest threats to already struggling companies are the probability of sovereign debt crisis in the eurozone and a double-dip recession in the U.S.
These events could ultimately induce a string of business failures that some bankruptcy and restructuring experts warn could "rival the one that followed Lehman Brothers."
According to bankruptcy data, Chapter 11 filings are on the rise with "at least $100 million in assets filed for bankruptcy in September, the most since 17 filed in April."
Some names recently filed include Friendly's and Open Range Communications Meanwhile, warnings of imminent bankruptcy filings for American Airlines and Eastman Kodak have been recently making headlines.
So we were wondering, which big U.S. companies might be next? To find out, we compiled a list with the help of Business Insider of bankruptcy candidates based on financial distress models developed by GovernanceMetrics International.
GovernanceMetrics International identifies these companies as having elevated financial distress probability and to have experienced high-risk events that increase the likelihood of bankruptcy.
Here are the top 10 biggest U.S. names on their list. Do you think any these companies will file in the near future? (Click here to access free, interactive tools to analyze these ideas.)
2. The Shaw Group
6. Barnes & Noble
7. Community Health Systems
9. Standard Pacific
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above.
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