Construction Startup Katerra Files for Bankruptcy, Commits to Completing Jersey City Projects Amid Mass Layoffs
Jersey City, NJ – California-based construction startup Katerra, after filing for Chapter 11 bankruptcy protection, has pledged to complete its remaining projects in Jersey City despite engaging in mass layoffs. The company notified local employees of their impending release in accordance with worker adjustment and retraining regulations. Katerra’s bankruptcy filing was driven by the economic downturn caused by the COVID-19 pandemic. The company has secured debtor-in-possession (DIP) financing to support its operations during bankruptcy proceedings and aims to consolidate activities, advance asset sales, and initiate an in-court restructuring process.
Katerra’s Chapter 11 Bankruptcy Filing and Local Layoffs
Katerra, a construction startup, has filed for Chapter 11 bankruptcy protection, resulting in mass layoffs. The company submitted a worker adjustment and retraining notification to the state’s Department of Labor and Workforce Development, informing 169 local employees of their release within 60 days. While this announcement potentially signifies the closure of Katerra’s Jersey City offices, the company has expressed its commitment to completing ongoing projects in the area. The bankruptcy filing is part of a multi-step action plan aimed at consolidating operations, securing financing, and restructuring the company.
Financial Challenges and SoftBank’s Involvement
Katerra, founded in 2015, raised nearly $3 billion in equity investments but struggled to generate profits, as noted in a declaration filed in connection with its bankruptcy petition. SoftBank, a Japanese venture capital group, injected over $2 billion into Katerra over six years, becoming its majority shareholder. However, when SoftBank ceased providing funding in May, Katerra faced financial difficulties, leading to personnel terminations and the discontinuation of unprofitable projects. Additionally, the firm encountered setbacks due to the combined impact of the COVID-19 pandemic and the insolvency of its former lender, Greensill Capital.
Seeking Competent Bankruptcy Law Attorneys in Jersey City, New Jersey
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Katerra’s Chapter 11 bankruptcy filing and subsequent layoffs mark a challenging period for the construction startup. Despite these financial difficulties, Katerra remains committed to completing its ongoing projects in Jersey City. The company’s pursuit of bankruptcy relief and debtor-in-possession financing demonstrates its determination to honor its local obligations. For businesses in Jersey City, New Jersey, seeking legal assistance during bankruptcy, USAttorneys.com serves as a valuable resource. By connecting businesses with competent Jersey City bankruptcy law attorneys, the platform offers essential guidance and support throughout the bankruptcy process. If you require a Jersey City, New Jersey bankruptcy law attorney, visit USAttorneys.com to find a trusted legal advocate to safeguard your rights and support your journey towards financial recovery.