A home improvement company now files an unexpected bankruptcy, leading the struggling business with plans to liquidate.
Common Living has filed for Chapter 7 bankruptcy and plans to liquidate.
The company, which filed its bankruptcy petition in U.S. Bankruptcy Court in Delaware, plans to sell as much as $10 million of assets, with the proceeds distributed to creditors, according to the bankruptcy filing.
Common Living has between $10 million and $50 million in liabilities.
Much like coworking pioneer WeWork, Common Living tried to solve a problem.
Coworking and co-living spaces solved that problem.
In a co-living situation, at least with Common Living, members get a private bedroom and access to common living, kitchen and bathroom areas.
They get a clean and safe place to sleep and room to socialize as much or as little as they choose for a price lower than the rent on an apartment.
The company shared its mission on its website.
“Common is creating better living through convenience and community,” it said.
“We keep the good parts of shared housing while removing the annoyances. Common members know their neighbors, meet new people, and save money.
Being a Common member means never having to worry about cleaning, moving furniture, or splitting the bills.”
The company currently operates in 12 cities across the U.S. and Canada and manages a total of 79 co-living communities, the website shows.
The Common Living website currently shows 18 listings for available space in properties in New York City, the Commercial Observer reported.
Common Living tried to create a community for the people living in its homes.
“With access to Connect by Common’s directory, members have the opportunity to truly know their neighbors and enjoy all the benefits of shared living,” the website says.
“By filling out their profile, members can find each other based on city, home, or interest tags.
It’s communal living made easy.”
However, the company did not answer the Commercial Observer’s request for comment and has not said what happens to current residents of its properties, per TheStreet.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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