Nearly Half of 2023’s Biggest Bankruptcies Lacked Key Warnings

Both management and auditors at nearly half of the 20 largest public companies that filed for bankruptcy in 2023 failed to wave key financial reporting red flags beforehand.

Retailer Party City Co., drug chain Rite Aid Corp., cargo hauler Yellow Corp., and online teeth alignment company SmileDirectClub Inc. are among the largest companies whose financial statements before bankruptcy disclosed financial woes but never specifically spelled out substantial doubts about their ability to survive another year, known in accounting lingo as “continuing as a going concern,” according to a Bloomberg Tax analysis.

The omissions contrast with the majority of ...