[Bug] Claude Code process exits with code 1 after upgrade to v2.1.111

Bug Description
I recently just upgraded my claude desktop with the pop up that says I should upgrade. After the upgrade, I noticed that claude cowork does not work anymoer. chat and code still works in claude desktop, just not cowork. I get a dialog saying "somethign went wrong... claude code process exited with code 1... you can restart the conversation from earlier message..."

xxx@xxx-MBP-M1 ~ % claude --version
2.1.111 (Claude Code)
xxx@xxx-MBP-M1 ~ %

xxx@xxx-MBP-M1 skills % claude doctor

──────────────────────────────────────────────────────────────────────
Diagnostics
└ Currently running: native (2.1.111)
└ Path: /Users/xxx/.local/share/claude/versions/2.1.111
└ Config install method: native
└ Search: OK (bundled)

Updates
└ Auto-updates: enabled
└ Auto-update channel: latest
└ Stable version: 2.1.97
└ Latest version: 2.1.111

Version locks
└ 2.1.110: PID 77227 (running)
└ 2.1.111: PID 34543 (running)
└ 2.1.86: PID 4025 (running)

Still having issues? Run /feedback to report details.

Environment Info

• Platform: darwin
• Terminal: Apple_Terminal
• Version: 2.1.111
• Feedback ID: 42b2e984-18da-4d88-91d6-774aa81f89a4

Errors

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