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Here are 7 of the well-known companies that went bankrupt in 2023 – Orange County Register

By Ramishah Maruf | CNN

It’s been a tough year for some well-known American retailers and businesses. As the economy emerged from the Covid-19 pandemic, businesses faced a long list of problems related to high costs, supply shortages and increasing competition.

As a result, several big names filed for bankruptcy in 2023.

Of course, bankruptcy does not necessarily mean that a company goes bankrupt. Many businesses in the United States file for bankruptcy to end certain operations, get rid of debt, and save on costs. A common route is Chapter 11 bankruptcy, which allows the company to resolve its financial problems through reorganization.

WeWork is preparing to file for bankruptcy as early as next week, according to people with knowledge of the matter. (AP Photo/Ted Shaffrey, file)

We work

WeWork had a wild year in 2023. Once the nation’s most valuable startup, the company seemed poised to reshape the nature of work in America. Some compare its meteoric rise and chaotic, high-profile fall to the fiascos of Fyre Festival and FTX.

The troubled coworking space company filed for Chapter 11 bankruptcy in November. It wasn’t really a surprise. The previous month, WeWork said it was struggling to repay debt after the pandemic shook its core business as more people worked from home.

The former tech unicorn, however, began to unravel well before Covid-19. A botched IPO attempt in 2019 derailed the company, revealing larger-than-expected losses and potential conflicts of interest with the company’s co-founder and then-CEO Adam Neumann. Neumann’s unorthodox leadership style was the subject of extensive media coverage (as well as a documentary on Hulu) and he was ousted in 2019.

WeWork said it would remain open and operational while its leases and debts were renegotiated.

Philadelphia-based Rite Aid announced it is filing for Chapter 11 bankruptcy protection.  The company, which will celebrate its 60th anniversary in 2023, has cut costs and closed some stores to deal with long-standing financial challenges.  (AP Photo/Gene J. Puskar, file)
Philadelphia-based Rite Aid announced it is filing for Chapter 11 bankruptcy protection. The company, which will celebrate its 60th anniversary in 2023, has cut costs and closed some stores to deal with long-standing financial challenges. (AP Photo/Gene J. Puskar, file)

Help with rites

After a long string of problems for pharmacies, Rite Aid filed for Chapter 11 bankruptcy in October.

Also see: 31 California stores on Rite Aid’s closing list

Like CVS and Walgreens, Rite Aid has had to settle costly lawsuits stemming from accusations of filling illegal opioid prescriptions for its customers. But unlike its competitors, Rite Aid was losing its battle against mounting debt and was unable to recover financially.

Rite Aid also struggled to compete with Amazon, Walmart, Target and Costco, friendlier alternatives to national drugstore chains.

In an October filing with the SEC, the company said it expected a significant increase in losses – on top of the three-quarters of a billion dollars it lost between March 2022 and March 2023 – and to an additional $307 million between March and May of this year.

The company said in a statement that it had secured $3.5 billion in financing and debt reduction deals from lenders to keep the company afloat during its bankruptcy. It said it would accelerate the pace of its store closures and sell some of its businesses, including prescription benefits provider Elixir Solutions; and also appointed a new CEO.

Rite Aid specifically cited increased thefts as some of its stores closed.

Overstock.com acquired bankrupt Bed Bath & Beyond for $21.5 million.  Online retailer Overstock.com is dropping its online name and becoming Bed & Bath & Beyond, which declared bankruptcy earlier this year.  (Photo by Scott Olson/Getty Images)
Overstock.com acquired bankrupt Bed Bath & Beyond for $21.5 million. Online retailer Overstock.com is dropping its online name and becoming Bed & Bath & Beyond, which declared bankruptcy earlier this year. (Photo by Scott Olson/Getty Images)

Bed Bath and Beyond

During a long journey that ended this year, the everything store filed for bankruptcy in April. It closed its last 360 stores as well as 120 buybuy BABY in one of the biggest retail bankruptcies in years.

But you will still see the famous blue logo. Overstock.com bought the brand out of bankruptcy and relaunched its own site under the name BedBathandBeyond.com. The move merged Overstock’s online business model and merchandise categories with popular branded products favored by Bed Bath & Beyond shoppers.

Also see: The $11.8 billion mistake that led to the demise of Bed, Bath & Beyond

Bed Bath & Beyond’s iconic “Big Blue” 20% off single item coupon has been resurrected, but can only be used online.

The company has long been downsized to save money. Earlier in 2023, it announced it would close around 400 locations, but keep profitable stores open in key markets. It also tried to save money by not paying severance packages to some workers laid off when stores closed.

Tuesday morning

Another housewares store that filed for bankruptcy in 2023 was Tuesday Morning, which filed for Chapter 11 bankruptcy in February due to its “extremely burdensome debt.” It was his second bankruptcy in three years.

Also see: Tuesday morning, closure of its Southern California stores

In May, the company announced it was winding down operations and closing all of its 200 stores.

Its first bankruptcy occurred in May 2020, at the height of the pandemic, due to prolonged store closures that caused an “insurmountable financial obstacle”. Three years ago, it previously had 700 sites.

Party city

The party seemed over for the party supply store when it filed for bankruptcy in January 2023, weighed down by competition and years of financial losses. In a regulatory filing, the company said it had reached an agreement with creditors to reduce its debt load by $1.7 billion.

The largest U.S. party supplier filed for bankruptcy in 2023, hit by competition from big retailers, rising costs during the pandemic and a helium shortage.

However, in September the company emerged from bankruptcy after a U.S. judge approved the retailer’s reorganization plans.

The plan cancels nearly $1 billion in Party City debt, and even if some of Party City’s debt 800 stores in the United States will close due to the bankruptcy agreement, the majority will remain open, according to the company.

SmileDirectClub

The telehealth orthodontics company closed its doors in December, less than three months after filing for Chapter 11 bankruptcy.

The company sold teeth aligners, with the typical course taking 4 to 6 months. The company encouraged customers stuck in the middle of their treatment to visit local dental offices.

SmileDirectClub, founded in 2014, once pitched itself as an affordable alternative to traditional services. orthodontics with the mission “to democratize access to a smile that everyone loves by making it affordable and practical for everyone”.

In a statement, the company said the restructuring would “enable SmileDirectClub to thrive as an international oral care leader for many years to come” and outlined its intention “to continue to provide affordable oral care and accessible to its customers without interruption.

Lordstown Motors

The electric vehicle maker filed for Chapter 11 bankruptcy in June and put itself up for sale.

It also announced legal action against Foxconn, accusing its main shareholder and former partner of setting out to “destroy” its business.

In a statement, the company said it was left with no choice after a high-profile partnership with Foxconn, one of the world’s largest electronics makers, fell through. He accused Foxconn of fraud and failing to keep promises to invest in the company.

Lordstown, named for its industrial base in Ohio, was the lifeblood of the local economy: It bought its factory from GM in 2019 to produce small cars for America’s largest automaker. At the start, it employed 1,600 people, but by the end of 2022, it had only 260 full-time employees. In 2021, just a few years after its launch, it warned that it could cease operations.

– CNN’s Catherine Thorbecke, Eva Rothenberg, David Goldman, Nathaniel Meyersohn, Jordan Valinsky, Samantha Delouya and Michelle Toh contributed to this report.

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