Bird, one of two companies WeHo contracts with to provide rental electric scooters, is seeking sought legal refuge under Chapter 11 bankruptcy in a Florida federal court, spokespeople announced Wednesday.
The company, once valued at $2.5 billion, has negotiated a baseline sale price with its current creditors through a “stalking horse” bid as part of the bankruptcy process. This move paves the way for an asset sale, which Bird aims to finalize within a 90- to 120-day timeframe.
Bird has promised uninterrupted service for its riders and to honor its commitments to fleet managers, employees and municipalities it works with, such as West Hollywood.
Just this week, West Hollywood City Council voted to extend Bird’s contract as part of the city’s Dockless Micromobility Pilot Program, much to the chagrin of many residents.
Bird, known for its eco-friendly scooters, emerged as a popular choice over traditional vehicles and public transportation before the Covid-19 pandemic struck. Its significant growth in 2019, marked by raising over $275 million, led to its $2.5 billion valuation.
However, the pandemic’s onset in 2020, which ushered in global lockdowns, dealt a heavy blow to Bird’s operations. The decrease in scooter usage led to financial difficulties. Despite merging with a special purpose acquisition company in 2021 and going public, the firm’s stock value suffered a steep decline.
Compounding these challenges, the New York Stock Exchange delisted Bird in September for not maintaining a requisite market capitalization of $15 million over a continuous 30-day period. Bird’s shares later found a place in the over-the-counter exchange, with their value dropping to below $1 each as of the latest update.
Well every time I see comments on any story on this site, it’s 9/10 times, it’s a negative reaction. Let’s face it. The people complaining don’t ever give positive feedback. That’s why Yelp and Google reviews are mostly negative reviews. Hardly anyone goes out of their way to give credit anymore unless there is incentives. How can we as WeHo residents really think that 20 people who complain about everything from avocado toast to scooters represent the majority of our town? If the people who do nothing but sit around and think of things to complain about all day had… Read more »
Beyond the pandemic shutdown period, I’ve noticed a dramatic downturn in scooter use over the past couple of years. I don’t know if it could be classified as a fad running its’ course, or if there is some other factor in play, but there just doesn’t seem to be as big an interest in electric scooters these days.
FYI…this morning I sent the following email to David Wilson, and to Lauren Langer. I hope they will have the courtesy of sending me a reply. Hi David and Lauren, As we all know, Bird Global declared chapter 11 bankruptcy yesterday. So, I think my question to you is logical one… Since they are now in bankruptcy, are they still going to be responsible for paying all the fees for all the infractions made by their customers and themselves as stipulated in the contract,? e.g. riders on the sidewalk, abandoned, scooters, insurance, etc. Also, will they be able to supply… Read more »
Bancruptcy is supervised by a court. Lime filed Chapter 11, reorganization, they did not file Chapter 7, liquidation. So they are able to receive DIP financing, (debtor in possession) and Apollo investment group provided the company with 25 million dollars to continue their operations.
thanks for the explanation Larry, but my question is will they still be responsible for paying all the ADA and other penalties that they may be responsible for?
They are responsible for their debts unless they are settled or dismissed. Businesses in Chapter 11, reorganization, under the court supervision may break contracts they deem ‘losers’, or terminate leases of unprofitable locations. The business will have to provide a ‘plan of reorganization’ and then will have wide latitude to adjust their business to survive. Once the plan is approved by the court, and all debts and obligations of the company are met – the company may emerge from bankruptcy and stand on its own two feet without court supervision.
I would also love to know how this contract will be upheld because 2 points in the contractual agreement are routinely violated and nothing has been done to stop these 2 points. I also would love Mayor Shyne to explain how she agreed to this contract after her insurance minimums were ignored by the e-scooter companies. These are the 2 points that are in the contract they awarded. 3.3 Accessibility Compliance. Operator acknowledges and agrees that the City rights-of-way constitute a program or service under the Americans with Disabilities Act (“ADA”). Operator expressly agrees to perform any obligation under this Agreement… Read more »
I took the liberty of forwarding your comment onto Lauren Langer. She did respond to my email and said that the city is looking into all the implications, and will keep us posted. But I thought your point was very important. So I responded again to her and told her that one of our citizens was asking these questions. Since I don’t know who you are, I couldn’t tell her from whom they were coming.
Mikie, its simple.
Bird took our money and ran. They waited for this renewal to file.
This news made my day! Let’s hope the same fate happens to Lime. In the meantime, maybe we should ban together and dump scooters on the doorstep of Sbyne, Erickson and Byers. They created this mess, so let them clean it up.
I guess that due diligence by staff and city attorney is not necessary when achieving the desired outcome is the goal.
“ Bird has promised … to honor its commitments to fleet managers, employees and municipalities it works with such as West Hollywood.” But – the article also says they’re selling their assets. Translation: Bird will continue to operate, but with different ownership. More to the point, senior management will be an entirely different group of people. Council needs to NOT follow through with the contract extension until it can affirm the managers they’ll be dealing with will be responsive to the City’s concerns, not just a group of vultures looking to screw WeHo and its citizens out of millions of… Read more »
The company will function as normal under the US bankruptcy laws. It received a capital infusion from Apollo Investments and will operate under debtor in possession status.
One of City Council’s stipulations were all new scooters required in their fleet for West Hollywood. This was brought forth by Mayor Shyne. Will she hold them to this point or kick the can once again?
So before we extended the contract, the City did not do a financial wellness report on this vendor. Whose job is that to do or think of? For very handsomely paid bureaucrats this city administration certainly continues to miss or not pay attention to red flags. We have a fleet of Chevy Bolts bought after the batteries caught fire in a garage, no research. We had a house burn down and harm a next door dwelling because the city would not enforce ordinances and looked the other way at homeless living in a condemned building and ignoring the continual drug… Read more »
I suppose the City won’t be getting new scooters now….
[pauses for dramatic effect]
no further comment.
oh, btw, #Nickle4WeHo
It makes no sense the city of West Hollywood city council would extend the contract of a bankrupt scooter company.The company promises “uninterrupted service for its riders and to honor its commitments to fleet managers, employees and municipalities it works with, such as West Hollywood”. Alright,let’s see how long that lasts.
Wow, a company once worth $2.5 billion is down to pennies.Be wary of riding any of those scooters as they will not be maintained properly.Stay off them!!
“And hast thou slain the Jabberwock?
Come to my arms, my beamish boy!
O frabjous day!
Callou, Callay!
He chortled in his joy!”
or
“Ding dong the witch is dead!
which old witch?
The wicked witch!
ding dong the wicked witch is dead!
She’s gone where the goblins go,
Below, below below!”
If Bird has declared bankruptcy… can Lime be far behind?
I sure hope so!!
In the words of William Shakespeare, “‘tis a consumation
devoutly to be wished”
Looks like our city council really did their due diligence with this deal!