The Garden State: where dreams for best-case bankruptcies blossom.
When WeWork filed for Chapter 11 bankruptcy protection in New Jersey, it followed in the footsteps of many struggling companies before it. The Wall Street Journal reported the co-working firm marks the seventh large bankruptcy case filed in New Jersey in the past year,.
Some of the companies filing for Chapter 11 in New Jersey — WeWork included — aren’t based in the state, but bankruptcy law allows companies to file cases in jurisdictions where they have an affiliate.
That’s given way to filings by several companies with large real estate footprints, drawn by the state’s stable roster of judges and history of rulings supportive of debtors. The state’s share of bankruptcies with at least $100 million in liabilities rose from below 2 percent to 5 percent in the last 12 months, according to New Generation Research.
Other major companies that have flocked to New Jersey to file for bankruptcy in the past year include David’s Bridal, Bed Bath & Beyond and Rite Aid.
The immediate fallout from WeWork’s bankruptcy filing at the start of the month has been the company going to work ditching dozens of leases, including around 40 in New York. Before the filing allowed it to drop the deals, the company previously told investors it will “try to renegotiate” nearly all of its expensive leases.
While WeWork’s struggles in recent months and years tempered the shock of a bankruptcy filing, it still marked a staggering fall for the co-working company once valued by private investors at $47 billion.
— Holden Walter-Warner