(WXYZ) - Household names like Circuit City and Linens 'n Things have already become victims of the horrible economy. Now Moody's Investor Services is saying they could just be the beginning of a bankruptcy wave.
Moody's predicts that the default rate on corporate bonds, which usually foretells bankruptcies, will be three time higher this year than last year. That could mean 25 bankruptcies a month.
Financial experts are warning that the following companies face an increased risk of bankruptcy, and even liquidation, this year.
1. Rite Aid - which employs about 100,000 people. The company purchased competitors Brooks and Eckerd in 2007, taking on a huge debt load just in time for the credit market to crash. Rite Aid is also facing stiff competition from Wal-Mart, which is selling prescription drugs.
2. Claire's Stores - which employs about 18,000 people. The trendy, teen-focused accessory store has faced cash flow problems over the past year. The forecast for 2009 shows no relief in sight. Experts believe it could declare Chapter 11, and even close all of its more than 3,000 stores.
3. Chrysler - which employs about 55,000 people. Financial Experts say it's never a good sign when management insists a company is not going out of business. But that's what CEO Bob Nardelli has been doing lately. Chrysler is also viewed as the most endangered of the Big 3, because of its product line. The deal with Fiat is also dubious, because it doesn't bring any money into the cash strapped automaker.
4. Dollar Thrifty Automotive Group - which employs about 7,000 people. The car-rental company is a small player in the business, and more reliant on leisure travelers than its bigger competitors. It is also closely tied to Chrysler, do if that company goes down, Dollar Thrifty may follow soon after.
5. Realogy Corp. - which employs about 13,000 people. The biggest real-estate brokerage firm in the country is suffering from double-digit declines in both sales and prices. The company, which includes Coldwell Banker, ERA and Sotheby's franchises, carries a huge debt load that goes back to the 2007 real estate implosion. It is also facing legal problems over it's attempts to refinance its debt.
6. Station Casinos - which employs about 14,000 people. The company, which runs 15 casinos off the Las Vegas strip, recently missed a key interest payment. That's usually one of the last steps before a company files for Chapter 11.
7. Loehmann's Capital Corp. - which employs about 1,500 people. The clothing chain's discount pricing formula would seem to be perfect for lean times, but consumers just aren't spending, no matter how good the deals may be. The company is facing the possibility of running out of cash if it doesn't get additional financing in 2009.
8. Sbarro - which employs about 5,500 people. Most of the company's stores are in malls, which have seen a steep decline in traffic as consumers put away their wallets. That also hampers the company from boosting revenue by adding breakfast and late-night menus, like some of their competitors. The company also has several key debt payments due this year.
9. Six Flags - which employs about 30,000 people. The theme-park operator has been losing money for several years, forcing it to sell of properties to pay down debt. Forecasts also call for negative cash flow in 2009, which could hurt the company's ability to pay off debts that are due next year.
10. Blockbuster - which employs about 60,000 people. Customers are cutting back on video rentals, just as the company began getting increasing competition from cable and internet operators. The company also have two credit lines set to expire in August. Some experts believe the company will be taken private until market condition improve.
11. Krispy Kreme - which employs about 4,000 people. The company over expanded during the 1990s, taking on a huge debt load. That has meant the company hasn't earned a profit in 3 years, despite cutting costs and closing under performing stores.
12. Landry's Restaurants - which employs about 17,000 people. The parent company of a number of restaurant chains needs $400 in new financing to finalize a buyout deal that dates back to last June. If the deal doesn't come through, the company should have enough cash to make it through, but with two banks already balking, the company is facing the prospect of a cash crunch.
13. Sirius Satellite Radio - which employs about 1,000 people. Satellite radio has never earned a profit. It's also paying out huge contracts to big name talent. While the company has now merged with XM radio, the deal hasn't generated the necessary savings yet. The company is also facing a possible takeover from EchoStar.
14. Trump Entertainment Resorts Holdings - which employs about 9,500. The company has already received several extensions on debt payments, and is trying to sell one of its Atlantic City properties. It is also facing a stack of debt. But so far no one is stepping forward, and gamblers are nursing their financial losses.
15. BearingPoint - which employs about 16,000 people. The consulting firm is facing operating problems. It has also consistently lost money, and is facing falling revenue. A key interest payment is due in April.
