WeWork Joins Growing List of Big Bankruptcies Filed in New Jersey

New Jersey - The Preferred Destination for Corporate Bankruptcies

It seems New Jersey has become a beacon for companies seeking the best possible outcomes in bankruptcy cases. The latest to join this trend is WeWork, the co-working giant, which recently filed for Chapter 11 bankruptcy protection in the Garden State. This move is not unique to WeWork, as several other struggling companies have chosen New Jersey as their bankruptcy jurisdiction over the past year.

Why New Jersey?

Interestingly, many of these companies, including WeWork, are not headquartered in New Jersey. However, bankruptcy laws permit companies to file cases in jurisdictions where they have an affiliate. This flexibility has attracted several firms with substantial real estate assets. New Jersey's stable panel of judges and a history of debtor-friendly rulings have further bolstered its appeal. The state's share of bankruptcies involving liabilities of at least $100 million has surged from less than 2% to 5% over the past year, according to New Generation Research.

Who Else Has Filed in New Jersey?

Among the major companies that have chosen New Jersey for their bankruptcy filings in the past year are household names like David’s Bridal, Bed Bath & Beyond, and Rite Aid.

The Aftermath of WeWork's Bankruptcy Filing

Following its bankruptcy filing, WeWork has begun the process of terminating dozens of leases, including approximately 40 in New York. Prior to the filing, the company had indicated to investors its intention to renegotiate almost all of its costly leases. Despite its recent struggles, WeWork's bankruptcy filing signifies a dramatic decline for a company that private investors once valued at a whopping $47 billion.

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