Contractor company went bankrupt. Can I still get paid?

G

Garegin Asatryan

New Member
Jurisdiction
New York
So, I work on this platform called Work Market. The work orders were invoiced in 2018, but I didn't notice that they weren't paid. The "client" or "buyer" as they call them, didn't pay the invoices and went bankrupt. Are there any legal cases open on this? I contacted WM and they said that they can't help after 60 days of the invoice. Thanks in advance

 
Garegin Asatryan said:
So, I work on this platform called Work Market. The work orders were invoiced in 2018, but I didn't notice that they weren't paid. The "client" or "buyer" as they call them, didn't pay the invoices and went bankrupt. Are there any legal cases open on this? I contacted WM and they said that they can't help after 60 days of the invoice. Thanks in advance

Click to expand...
How much money do you believe WM owes you?

A ballpark number is all I need, then I'll suggest a couple strategies you can investigate.

Before you ask, you can forget small claims court.
In NY state, the small court limit approximate $3,000 to $5,000, depending on where in NY state your reside.
 
Garegin Asatryan said:
So, I work on this platform called Work Market. The work orders were invoiced in 2018, but I didn't notice that they weren't paid. The "client" or "buyer" as they call them, didn't pay the invoices and went bankrupt. Are there any legal cases open on this? I contacted WM and they said that they can't help after 60 days of the invoice. Thanks in advance

Click to expand...

My friend, suing anyone or any entity AFTER the individual/entity has filed for bankruptcy can be challenging, if not impossible.

You have a chance, but that requires the entity to possess a residue of funds. That is very doubtful, insofar as World Market is concerned. World Market seems to be bereft of any excess funds, as the bankruptcy filing reveals very little, if any THERE THERE!

Coworking space startup WeWork filed for bankruptcy Monday after years of losses and turmoil—a steep fall from its peak valuation of $47 billion in 2019, making it one of the most valuable startups in the US at the time.

TIMELINE

2010Cofounders Adam Neumann and Miguel McKelvey opened the first WeWork in the SoHo neighborhood of New York City, allowing anyone from freelancers to large businesses to rent office spaces and desks.

December 2014WeWork closed a Series D funding round of $355 million, which led to a company valuation of $5 billion, the Wall Street Journal reported.

2016Neumann met Masayoshi Son, the CEO of SoftBank Group Corp., which eventually led to SoftBank committing $3.1 billion in new funding for WeWork in 2017, the Journal reported.

2017WeWork opened its 200th location in Singapore—adding to its global collection of coworking spaces including in New York, São Paulo, London, and Seoul—and reached a $20 billion valuation after raising a $760 million Series G round.
January 2019SoftBank led WeWork's Series H funding round which raised $1 billion—totaling SoftBank's overall investment into the company at $10 billion—and valued WeWork at $47 billion.

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FORBESBUSINESS
BREAKING
WeWork's Rise To $47 Billion—And Fall To Bankruptcy: A Timeline
Britney Nguyen
Forbes Staff
I am a reporter on the breaking news team based in New York City.
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Nov 7, 2023,04:28pm EST
TOPLINE Coworking space startup WeWork filed for bankruptcy Monday after years of losses and turmoil—a steep fall from its peak valuation of $47 billion in 2019, making it one of the most valuable startups in the US at the time.
US-REAL-ESTATE-CULTURE-WEWORK
WeWork filed for Chapter 11 bankruptcy, and saw its stock fall to 84 cents a share, giving the ... [+]AFP VIA GETTY IMAGES
TIMELINE
2010Cofounders Adam Neumann and Miguel McKelvey opened the first WeWork in the SoHo neighborhood of New York City, allowing anyone from freelancers to large businesses to rent office spaces and desks.

December 2014WeWork closed a Series D funding round of $355 million, which led to a company valuation of $5 billion, the Wall Street Journal reported.

2016Neumann met Masayoshi Son, the CEO of SoftBank Group Corp., which eventually led to SoftBank committing $3.1 billion in new funding for WeWork in 2017, the Journal reported.

2017WeWork opened its 200th location in Singapore—adding to its global collection of coworking spaces including in New York, São Paulo, London, and Seoul—and reached a $20 billion valuation after raising a $760 million Series G round.

January 2019SoftBank led WeWork's Series H funding round which raised $1 billion—totaling SoftBank's overall investment into the company at $10 billion—and valued WeWork at $47 billion.

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August 14, 2019WeWork publicly filed for an IPO, but its filings showed large losses, such as a $1.9 billion loss on $1.8 billion in revenue in 2018 according to CNBC, and a $690 million loss on $1.5 billion in revenue for the first half of 2019, Insider reported.

September 24, 2019Neumann stepped down as CEO amid scrutiny from WeWork's board members and investors over his leadership—including allegations of self-dealing—and financial problems, after the company delayed its IPO the previous week and reduced its estimated market valuation to $10 billion from $47 billion.

September 30, 2019WeWork submitted a request to federal regulators to withdraw its IPO plans, with co-CEOs Artie Minson and Sebastian Gunningham, Neumann's replacements, saying the company wanted to "focus on our core business, the fundamentals of which remain strong."

May 18, 2020SoftBank CEO Son, who invested over $10 billion in WeWork and pushed its valuation from $17 billion to $47 billion, said he was "foolish" for the firm's investments, and valued WeWork at $2.9 billion, CNBC reported.

May 2021WeWork lost $2.1 billion in its first quarter of the year according to the Financial Times, which pointed to the coronavirus pandemic and a settlement between SoftBank and Neumann, who sued the bank for trying to back out of a $3 billion deal to buy shares of WeWork from its earliest employees and Neumann.

October 21, 2021WeWork went public at a $9 billion valuation after merging with special purpose acquisition company BowX Acquisition Corp., and saw its shares rise 13% despite filings showing the company was losing billions of dollars.

August 2022WeWork said its offices reached pre-pandemic occupancy levels—72%—after a heavy drop during the first year of the coronavirus pandemic, when many members decided to work from home and canceled their rental contracts with WeWork, Bloomberg reported.

August 8, 2023WeWork said its losses and negative cash flows were giving the company doubt about its ability to continue operating, warning of a possible bankruptcy in a Securities and Exchange Commission filing.

September 6, 2023WeWork announced its plans to renegotiate "nearly all" of its leases by leaving "unfit and underperforming locations" and reinvesting in better-performing markets to cut operating costs and continue running "for many years to come."

November 6, 2023WeWork filed for Chapter 11 bankruptcy and its stock fell to 84 cents a share, giving it a $44.5 million valuation.

KEY BACKGROUND
WeWork has $15 billion worth of assets but $18.6 billion in debt, according to the Wall Street Journal. It also reportedly owes almost $100 million "in unpaid rent and lease termination fees" to real-estate companies and property owners it worked with. Neumann stepped down from leading WeWork after its failed IPO filing revealed details about potential conflicts of interest that former Twitter CEO Dick Costolo told the Journal are "so egregious," including an entity controlled by Neumann selling the rights to the "We" family trademarks to the company for $6 million, though Neumann eventually changed his mind. Neumann said in a statement that watching WeWork's fall since he left the company in 2019 "has been challenging," noting that the coworking space startup "has failed to take advantage of a product that is more relevant today than ever before." Meanwhile, CEO David Tolley said in September the company has tried to pivot from a "period of unsustainable hypergrowth."

WHAT TO WATCH FOR
WeWork's bankruptcy filing is limited to its spaces in the U.S. and Canada, and the company has 777 locations across 39 countries. On November 6, over 400 of its other entities filed for bankruptcy too, including "many individual subsidiaries" it used to run its spaces in other countries, the Wall Street Journal reported.

BIG NUMBER
$47 billion. That was WeWork's peak private valuation in January 2019 before its failed IPO.

FORBES VALUATION
We estimate Neumann to be worth $2.2 billion. Since leaving WeWork, Neumann has started another real-estate startup called Flow, which received a $350 million investment from venture capital firm Andreessen Horowitz. The startup reportedly involves real estate management software and aims to launch a digital wallet to store different currencies including crypto.

FURTHER READING
WeWork Files For Bankruptcy. Stock Is Halted At 84 Cents A Share (Forbes)

WeWork Files For Chapter 11 Bankruptcy (Forbes)

Correction: This story has been updated to clarify the entity controlled by Neumann tried to sell the rights to the "We" family trademarks and the sale did not happen.


www.forbes.com

WeWork’s Rise To $47 Billion—And Fall To Bankruptcy: A Timeline

WeWork filed for Chapter 11 bankruptcy, and saw its stock fall to 84 cents a share, giving the company a $44.5 million valuation.
www.forbes.com www.forbes.com


Nov 7 (Reuters) - Flexible workspace provider WeWork (WE.N), opens new tab sought U.S. bankruptcy protection on Monday, crippled by a large debt pile and soaring losses due to lower demand for office space from cost-conscious customers.
WeWork was once the most valuable U.S. startup, worth $47 billion. It courted investments from blue-chip investors, including SoftBank and venture capital firm Benchmark, as well as major Wall Street Banks including JPMorgan Chase (JPM.N), opens new tab.
The following explains WeWork's meteoric rise and fall that reshaped the office sector globally:
What is WeWork?
WeWork, founded in 2010, aimed to revolutionize the office market by taking long leases on large properties and renting the space to multiple smaller businesses on more flexible, shorter arrangements. It was seen as a disruptor with a business model unhindered by property ownership. It expanded at breakneck speed, which increased revenue but also racked up steep losses.
Who are the company's founders?
Adam Neumann, his wife Rebekah Neumann, together with Miguel McKelvey founded the company and helped it grow to be the most valuable U.S. startup worth $47 billion. WeWork's brand was strongly tied to the flamboyant, freewheeling Israel-born entrepreneur, who had said that his company's mission was to "elevate the world's consciousness."
However, Neumann's pursuit of swift growth at the expense of profits and revelations about his eccentric behavior led to his ouster and the derailment of an initial public offering in 2019.
Just before WeWork filed for bankruptcy this week, Neumann said, "I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully."
"The company was the product of a boom, and during booms, investors ignore the flashing warning lights. 'Charismatic CEO' is a term that should strike fear into any investor's heart," said Steve Clayton, head of equity funds at Hargreaves Lansdown, on Tuesday.
How did WeWork's fortunes plummet?
WeWork's dramatic fall followed lavish predictions about its prospects from SoftBank founder Masayoshi Son.
WeWork first tried to launch an IPO with Neumann as chief executive in 2019, with its parent, We Company, spending months preparing for the public offering. The proposed share sale imploded spectacularly after investors questioned the company's hefty losses and balked at Neumann's management style and corporate governance lapses.
By 2021, estimates of WeWork's value had fallen as low as $10 billion. The company finally went public through a merger with a blank-check acquisition company in October of that year.
The company's rise and fall was turned into a television series "WeCrashed," starring Oscar winners Jared Leto as Neumann and Anne Hathaway as Rebekah.
Why did WeWork seek U.S. bankruptcy protection?
The company grappled with expensive leases and corporate clients cancelling agreements as vast numbers of people started to work from home after the COVID-19 pandemic. The company worked to amend its leases and restructure its debts, yet this was not enough to stave off its bankruptcy.
"Innovative financial metrics are rarely truly innovative, instead being a way of disguising a lack of cash profits, and WeWork played that game for all it was worth," Clayton said.
As of the end of June, WeWork's long-term lease obligations were $13.3 billion - a crippling burden for the company in the post-COVID plunge in demand for office space.
What is next for the company?
WeWork said on Monday about 92% of the company's lenders had agreed to convert their secured debt into equity under a restructuring support agreement, wiping out about $3 billion of debt.
"WeWork could use provisions of the U.S. bankruptcy code to rid itself of onerous leases," law firm Cadwalader, Wickersham & Taft LLP said in a note to landlords on its website in August.
Sam Stovall, chief investment strategist of CFRA Research said, "I would not be surprised if SoftBank is simply trying to get as much of its own investment out of the company before it joins Titanic at the bottom."
The global commercial property lending market could be in for a rough 2024, as vacancies are expected to climb in the coming months. Overall real estate values have dropped sharply due to weak demand and investor reluctance to invest.
Reporting by Kannaki Deka and additional reporting by Susan Mathew in Bengaluru; Editing by Anil D'Silva

Our Standards: The Thomson Reuters Trust Principles.

 
Even if you disregard the bankruptcy (you won't, of course), depending on when the work was done, you might be outside the statute of limitations.
 
Garegin Asatryan said:
The work orders were invoiced in 2018, but I didn't notice that they weren't paid.
Click to expand...

When in 2018? When were your invoices due? It's possible that the six year statute of limitations in CPLR 213 applies.


Garegin Asatryan said:
The "client" or "buyer" as they call them, didn't pay the invoices and went bankrupt.
Click to expand...

The BK case mentioned in the link you provided was filed under Ch. 7 in 2019. It was a no-asset case that was closed after 10 months.


Garegin Asatryan said:
Are there any legal cases open on this?
Click to expand...

You mean other than the bankruptcy? How should we know?

Unless you have some legal basis for holding someone other than the debtor liable, you're s*** out of luck.
 
Garegin Asatryan said:
So, I work on this platform called Work Market. The work orders were invoiced in 2018, but I didn't notice that they weren't paid. The "client" or "buyer" as they call them, didn't pay the invoices and went bankrupt. Are there any legal cases open on this? I contacted WM and they said that they can't help after 60 days of the invoice. Thanks in advance

Click to expand...
The problem is that once it filed Chapter 7 bankruptcy the bankruptcy code determines the priority of payment. A Chapter 7 bankruptcy for a business is basically just an organized sale of assets to pay creditors in the priority set out in the bankruptcy code. You would have had to file a proof of claim to be in line for payment if the company didn't list you itself. As the bankruptcy is now closed, presumably all its assets are gone and there is nothing left for a creditor to get. That's one of the problems of forgetting about money owed and only looking into it years later. Those creditors most on the ball to get to the debtors assets first are the ones that get paid. Those who sit and wait awhile lose out while those other creditors grab what's available.
 

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