Residents of North Carolina may have heard that the stationary bike company Flywheel filed for bankruptcy after suffering from multiple losses and drawbacks in the past few years. In September 2018, competitor brand Peloton sued Flywheel for allegedly stealing the company’s technology. The battle extended into February 2020 when Flywheel was finally forced to shut down its in-home virtual classes over accusations of patent infringement.

Several weeks later, Flywheel suffered massive losses and was forced to close its studios and lay off 98% of its staff. The company cancelled its few remaining classes in New York and Florida. In September 2020, the company officially filed for commercial bankruptcy. While the company hasn’t officially spoken to the press, the company filed for bankruptcy in New York. Former Flywheel instructors have also posted about the bankruptcy on social media.

Before its recent losses, Flywheel had been going strong as a 10-year-old company. Now, its competitors SoulCycle and Peloton appear to have taken its place. Peloton has reported massive profits, and SoulCycle is reopening studios across the United States.

How can businesses safely file for bankruptcy?

When a business owner can’t keep up with their debts and experiences more losses than profits, they might decide that it’s time to file for bankruptcy. During the process, they might find it beneficial to hire an attorney. An attorney may help them figure out if they’re eligible for bankruptcy and gather the necessary financial documents.

To prepare to file for bankruptcy, business owners may need to gather extensive financial documents including bank statements, a list of creditors, copies of their pay stubs, property documents, information on other sources of income, tax returns from the past two years and more. An attorney may be able to help their client assess the situation and figure out the best solution to discharge their debts.