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In its heyday a few years ago, WeWork said that it would reinvent offices. But the company never created a sustainable business or changed how most people worked, the New York Times reported. The business of offering flexible office space on short leases to individuals and businesses, a model that WeWork hoped to make mainstream, remains a niche in commercial real estate despite the billions of dollars the company and others invested in the approach. Flexible office space accounts for less than 2 percent of all office space in the 20 largest U.S. markets, according to Cushman & Wakefield, close to its share before the pandemic. WeWork filed for bankruptcy protection this week in an effort to quickly slim down its portfolio of office spaces. The company wants to give up over 70 leases right away, with possibly more to follow. Other co-working companies may take over some of those locations, but some owners of office buildings said they were not expecting this approach to ever amount to more than a small part of their business. Many employers are paring back their office space because workers aren’t going in five days a week after growing accustomed to working remotely or on a hybrid schedule. Office vacancies are at their highest level in decades, with lots of space available for sublet often at a deep discount from the rents that prevailed before the pandemic. WeWork’s bankruptcy will only make the situation worse by leaving landlords with more space to fill.

The Canastra family, owners of New Bedford’s (Mass.) seafood auction, closed a deal to buy out groundfish giant Blue Harvest Fisheries from bankruptcy, a move finalized Wednesday with the approval of a federal judge, the New Bedford Light reported. After a short bidding war, Cassie Canastra submitted the highest bid of $12 million on Monday, beating out the second-highest bid from O’Hara Corporation, which is a part owner of New Bedford-based Eastern Fisheries, by $750,000. The sale includes “all the vessels, all the permits” that once belonged to Blue Harvest Fisheries. It includes eight vessels and 48 state and federal fishing permits, representing about 13% of all Northeast groundfish permits or about 250 million pounds of quota for the current fishing year. The sale marks the final chapter in the saga of Blue Harvest Fisheries, which was founded in 2015 by the Dutch billionaire Brenninkmeijer family, through their Manhattan-based private equity firm. The company quickly expanded to become the single-largest groundfish company on the East Coast before declaring bankruptcy in September and liquidating its assets.

A Fort Collins, Colo.-based homebuilder facing a number of lawsuits has filed for chapter 7 bankruptcy, BusinessDen.com reported. Bluestone Homes of Colorado, which lists a Fort Collins P.O. box as its address, filed for bankruptcy Oct. 31. Terence Hoaglund founded Bluestone in 2009. According to its website, it designs and builds energy-efficient homes, with long-term goals of building “net-zero-energy homes.” In court filings, Bluestone Homes listed assets of $171,876 and said it owes $2.4 million to 52 creditors, including contractors and customers who put down deposits. Hoaglund, who signed the filings, claimed he is owed $43,405 for paying company debts on personal credit cards. The filings show revenue has dropped this year compared to years past. From January to the Oct. 31 filing date, Bluestone reported a loss of $528,000 on $780,000 in revenue. That compares to $2.7 million revenue reported last year and $6.4 million reported in 2021.

WeWork will make its first U.S. bankruptcy court appearance today, seeking to advance a restructuring proposal that could cut $3 billion in debt and shrink the company's real estate footprint, Reuters reported. The Softbank-backed office space-sharing company filed for bankruptcy protection in Newark, N.J., bankruptcy court on Monday, seeking to address more than $4 billion in debt and unsustainable rent costs. WeWork, once valued at $47 billion, expanded at breakneck speed but racked up steep losses on its long-term lease obligations after a post-COVID plunge in demand for office space. After an earlier effort to restructure its debts failed to stave off bankruptcy, WeWork reached a restructuring agreement with over 90% of its bondholders to convert $3 billion of debt into equity in the company. Softbank, which currently owns about 70% of the company, would retain an equity stake under the proposed restructuring. WeWork managed to renegotiate 590 leases before filing for bankruptcy, saving about $12.7 billion in future rent payments. But it says it has more work to do to get rent costs under control. The company has identified 69 leases it intends to break in the initial days of its bankruptcy, including 41 in New York City, and it could seek to reject additional leases later in its bankruptcy. WeWork said it is seeking to renegotiate terms on other leases with 400 landlords.
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In related news, WeWork's $3 billion debt for equity swap deal with its creditors marks the latest effort by top shareholder SoftBank to revive the troubled office-space provider and recoup some of the billions it has invested, Reuters reported. Whether the bet succeeds now depends on WeWork renegotiating the costly long-term leases it signed during the boom years and is now unable to pay, forcing it to file for bankruptcy on Monday. WeWork's long-term lease obligations of $13.3 billion accounted for more than 70% of its total debt as of end-June. Those deals, many agreed during a period of breakneck growth under founder Adam Neumann, became a crippling burden as the post-COVID shift towards working from home led to a plunge in demand for office space. Neumann quit as CEO in 2019, bowing to pressure from some investors. WeWork renegotiated some of its leases to reduce its obligations by more than $2 billion since the end of 2022. Read more.

Sam Bankman-Fried’s criminal fraud conviction came just as the FTX implosion was approaching its first anniversary. But for others who helped promote the cryptocurrency exchange, the legal fallout will continue for years, Bloomberg News reported. Attention now turns to a sweeping class-action suit in Miami federal court by investors who claim they lost billions in the collapse of FTX and seek to pin blame not just on Bankman-Fried and his inner circle, but also on celebrities who were paid to endorse it to the masses, as well as bankers, accountants and lawyers who propped up the empire’s legitimacy. Flashy advertisements featuring Larry David and Tom Brady touting FTX were among the very first bits of evidence shown to the jury at the start of a monthlong trial in Manhattan that culminated in Bankman-Fried being found guilty last week of seven counts of fraud and conspiracy. The class action, which seeks to cover hundreds of thousands of investors, alleges that celebrity endorsers and firms that provided financial and legal services to FTX would have seen red flags about the business if they had done proper due diligence. The Miami case seeks unspecified damages for the $8 billion that FTX allegedly “stole” from investors — and most of which “vanished.” The guilty verdict for Bankman-Fried doesn’t directly establish a central contention in the class action — that dozens of celebrities and other alleged enablers should have known he was up to no good when they signed on as advisers or brand ambassadors. But the 31-year-old’s conviction for what Manhattan’s top federal prosecutor Damian Williams called “one of the biggest financial frauds in American history” will add momentum to the investors’ case, according to Daniel Richman, a professor at Columbia Law School.

The office of Attorney General Andrea Joy Campbell on Monday filed a petition objecting to the proposed terms of the chapter 11 voluntary bankruptcy of Vantage Travel, the Boston-based international travel company that went out of business last month, the Boston Globe reported. In a 15-page petition filed in U.S. Bankruptcy Court in Boston, Campbell joined with the attorney general of New York in saying the proposed terms of liquidation of Vantage’s paltry remaining assets doesn’t do enough for consumers. Thousands of Vantage customers are owed a total of more than $100 million in refunds for trips the company booked but then postponed or canceled. The attorneys general in New York and Pennsylvania earlier this year sued not only Vantage on behalf of customers in their state, but also Vantage’s founder and longtime owner Hank Lewis, who may have personal assets that could be subject to the proceedings. The suits accused Vantage and Lewis of “persistent fraudulent conduct” and “deceptive and unfair business practices” in the handling of customer deposits. In Monday’s filing, Campbell’s office said the bankruptcy proceedings unfairly treats customers as “general unsecured” creditors, when they should be treated as priority creditors for at least the first $3,350 owed to them. It also says future travel credits offered to customers “are really just coupons” which aren’t appropriate for settling claims.

Three weeks after a 40-year-old Montana-based trucking company and freight brokerage abruptly ceased operations, Meadow Lark Agency and its affiliate, Meadow Lark Transport, filed for bankruptcy liquidation on Monday, Freight Waves reported. The companies, headquartered in Billings, Mont., filed for chapter 7 protection in the U.S. Bankruptcy Court for the District of Montana. In its petition, the Meadow Lark entities list assets of between $10 million and $50 million and liabilities of between $1 million and $10 million. The petition states they have up to 5,000 creditors and that no funds will be available to unsecured creditors once it pays administrative fees. The petition lists assets of nearly $15.4 million in receivables from Meadow Lark Transport.

Local mattress company Direct Mattress Inc. and its associated businesses filed for bankruptcy last month, following a series of lawsuits from its landlords over unpaid rent, the St. Louis Post-Dispatch reported. Bankruptcy documents reflect that the company's estimated assets and liabilities are both between $1 million and $10 million. Filed documents also reflect that the company will continue to operate. Headquartered in St. Peters, the firm has 11 store locations around the St. Louis region. This year alone, Direct Mattress has been peppered with a number of lawsuits totaling nearly $1 million in unpaid rent from half a dozen landlords. Local creditors with unsecured claims include $480,000 to Carrollton Bank; $252,176 to Dierbergs Wentzville; $99,858 to St. Louis Post-Dispatch; $260,971 to USR-DESCO Washington Crossing LLC; and $106,617 to Water Tower Development LLC.

Denn-Ohio LLC, a Denny’s franchisee in Kentucky, Michigan, and Ohio, has filed for chapter 11 protection, seeking to close two more diner units and facing a hearing in December, court documents indicate, NRN.com reported. Denn-Ohio, which expects to have eight diners remaining after it closes units in Toledo, Ohio, and Kalamazoo, Mich., filed its chapter 11 petition on Oct. 31 in the Bankruptcy Court for the Western District of Michigan. The presiding bankruptcy judge filed an order for a hearing on the case Dec. 13. Filings indicate the company, which once operated 27 Denny’s locations, expects after the Toledo and Kalamazoo closures, to have units in Kentucky (Elizabethtown and Louisville), Michigan (Grand Rapids and Wyoming) and Ohio (Berkshire Township, Columbus, Jeffersonville, Perrysburg).