Top 10 Biggest Business Failures in History

Lehman Brothers' 2008 bankruptcy was the largest in US history, with $639 billion in assets — nearly double Enron's collapse. The 158-year-old investment bank's excessive exposure to subprime mortgage securities triggered the global financial crisis. Its failure froze credit markets worldwide, contributed to the loss of 8.7 million US jobs, and sparked $700 billion in US government bailouts for other institutions. No executives faced criminal charges.

WorldCom's 2002 bankruptcy was the largest in US history at the time, involving $11 billion in accounting fraud that inflated profits by treating operating expenses as capital expenditures. Once America's second-largest long-distance phone company with $35 billion in revenue, WorldCom's collapse destroyed $180 billion in shareholder value. CEO Bernie Ebbers was sentenced to 25 years in prison. The scandal directly led to the Sarbanes-Oxley Act of 2002.

Theranos promised to revolutionize blood testing with a finger-prick device that could run 200+ tests on a single drop of blood. At its peak in 2014, the Silicon Valley startup was valued at $9 billion, making founder Elizabeth Holmes the youngest self-made female billionaire. The technology was a fraud — Theranos was secretly running samples on conventional machines. Holmes was convicted of criminal fraud in 2022 and sentenced to 11 years in federal prison.

FTX's November 2022 collapse was the crypto industry's Lehman Brothers moment. The Bahamas-based exchange, once valued at $32 billion, was secretly using customer funds to cover trading losses at its sister hedge fund Alameda Research. An estimated $8 billion in customer deposits vanished overnight. Founder Sam Bankman-Fried, once celebrated as crypto's golden boy and a leading political donor, was convicted on seven counts of fraud in 2023 and sentenced to 25 years in prison.

WeWork's story is the defining startup cautionary tale of the 2010s. The co-working company raised $12.8 billion from SoftBank at a $47 billion valuation in 2019, then saw its IPO collapse amid revelations of $1.9 billion in annual losses, founder Adam Neumann's erratic behavior, and egregious self-dealing. By 2023, WeWork filed for bankruptcy — once the most valuable startup in America, it ended with a market cap near zero. Neumann received a $1.7 billion golden parachute.

Kodak's failure is the textbook case of innovator's dilemma. The Rochester, New York company dominated global photography for a century, controlling 90% of US film sales and inventing the digital camera in 1975 — then refusing to commercialize it out of fear of cannibalizing film. Digital cameras and smartphones made film obsolete. Kodak filed for bankruptcy in 2012 after 131 years, shedding 140,000 jobs from its 1988 peak employment.

Toys "R" Us's 2017 bankruptcy and 2018 liquidation of all 800 US stores ended a 70-year-old retail institution. The chain was saddled with $5.3 billion in debt from a 2005 leveraged buyout by KKR, Bain Capital, and Vornado Realty, leaving it unable to invest in digital transformation as Amazon captured its core business. The closure eliminated 33,000 jobs. Private equity's role in its destruction became a rallying cry for buyout industry reform.

Nokia's fall from the world's #1 phone maker (controlling 40% of the global mobile phone market in 2007) to irrelevance by 2013 is the most dramatic collapse in technology history. Having dominated the mobile era for a decade, Nokia failed to respond to the iPhone's 2007 touchscreen revolution. Internal culture problems, bureaucracy, and reluctance to adopt new operating systems led to its mobile phone business being sold to Microsoft for $7.2 billion in 2013 — a fraction of its peak value.

Bed Bath & Beyond's 2023 bankruptcy eliminated a 52-year-old American retail institution that had once dominated the home goods category with 1,500 stores and $12 billion in peak revenue. The company spent $11.8 billion on stock buybacks between 2004 and 2019 — money that could have funded digital transformation and store modernization — instead enriching shareholders while gutting its competitive position. Its meme stock moment in 2022 briefly revived its stock before the inevitable collapse.

Lehman Brothers' 2008 bankruptcy was the largest in US history, with $639 billion in assets — nearly double Enron's collapse. The 158-year-old investment bank's excessive exposure to subprime mortgage securities triggered the global financial crisis. Its failure froze credit markets worldwide, contributed to the loss of 8.7 million US jobs, and sparked $700 billion in US government bailouts for other institutions. No executives faced criminal charges.

WorldCom's 2002 bankruptcy was the largest in US history at the time, involving $11 billion in accounting fraud that inflated profits by treating operating expenses as capital expenditures. Once America's second-largest long-distance phone company with $35 billion in revenue, WorldCom's collapse destroyed $180 billion in shareholder value. CEO Bernie Ebbers was sentenced to 25 years in prison. The scandal directly led to the Sarbanes-Oxley Act of 2002.

Theranos promised to revolutionize blood testing with a finger-prick device that could run 200+ tests on a single drop of blood. At its peak in 2014, the Silicon Valley startup was valued at $9 billion, making founder Elizabeth Holmes the youngest self-made female billionaire. The technology was a fraud — Theranos was secretly running samples on conventional machines. Holmes was convicted of criminal fraud in 2022 and sentenced to 11 years in federal prison.

FTX's November 2022 collapse was the crypto industry's Lehman Brothers moment. The Bahamas-based exchange, once valued at $32 billion, was secretly using customer funds to cover trading losses at its sister hedge fund Alameda Research. An estimated $8 billion in customer deposits vanished overnight. Founder Sam Bankman-Fried, once celebrated as crypto's golden boy and a leading political donor, was convicted on seven counts of fraud in 2023 and sentenced to 25 years in prison.

WeWork's story is the defining startup cautionary tale of the 2010s. The co-working company raised $12.8 billion from SoftBank at a $47 billion valuation in 2019, then saw its IPO collapse amid revelations of $1.9 billion in annual losses, founder Adam Neumann's erratic behavior, and egregious self-dealing. By 2023, WeWork filed for bankruptcy — once the most valuable startup in America, it ended with a market cap near zero. Neumann received a $1.7 billion golden parachute.

Kodak's failure is the textbook case of innovator's dilemma. The Rochester, New York company dominated global photography for a century, controlling 90% of US film sales and inventing the digital camera in 1975 — then refusing to commercialize it out of fear of cannibalizing film. Digital cameras and smartphones made film obsolete. Kodak filed for bankruptcy in 2012 after 131 years, shedding 140,000 jobs from its 1988 peak employment.

Toys "R" Us's 2017 bankruptcy and 2018 liquidation of all 800 US stores ended a 70-year-old retail institution. The chain was saddled with $5.3 billion in debt from a 2005 leveraged buyout by KKR, Bain Capital, and Vornado Realty, leaving it unable to invest in digital transformation as Amazon captured its core business. The closure eliminated 33,000 jobs. Private equity's role in its destruction became a rallying cry for buyout industry reform.

Nokia's fall from the world's #1 phone maker (controlling 40% of the global mobile phone market in 2007) to irrelevance by 2013 is the most dramatic collapse in technology history. Having dominated the mobile era for a decade, Nokia failed to respond to the iPhone's 2007 touchscreen revolution. Internal culture problems, bureaucracy, and reluctance to adopt new operating systems led to its mobile phone business being sold to Microsoft for $7.2 billion in 2013 — a fraction of its peak value.

Bed Bath & Beyond's 2023 bankruptcy eliminated a 52-year-old American retail institution that had once dominated the home goods category with 1,500 stores and $12 billion in peak revenue. The company spent $11.8 billion on stock buybacks between 2004 and 2019 — money that could have funded digital transformation and store modernization — instead enriching shareholders while gutting its competitive position. Its meme stock moment in 2022 briefly revived its stock before the inevitable collapse.