The WeWork logo is displayed outside of a shared business office space constructing in Los Angeles, California on August 8, 2023. Embattled office-sharing firm WeWork on August 8 warned US regulators that it’s nervous about its survival. Citing financial losses, money needs, and a drop in memberships, WeWork said in a filing with the Securities and Exchange Commission (SEC) that “substantial doubt exists concerning the company’s ability to proceed as a going concern.” (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
Patrick T. Fallon | Afp | Getty Images
Office-sharing company WeWork filed for Chapter 11 bankruptcy protection in Recent Jersey federal court Monday, saying that it had entered into agreements with the overwhelming majority of its secured note holders and that it intended to trim “non-operational” leases.
The bankruptcy filing is proscribed to WeWork’s locations within the U.S. and Canada, the corporate said in a press release. WeWork reported liabilities starting from $10 billion to $50 billion, in keeping with an initial filing.
“I’m deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement,” WeWork CEO David Tolley said in a press release. “We remain committed to investing in our products, services, and world-class team of employees to support our community.
WeWork has suffered one of the spectacular corporate collapses in recent U.S. history over the past few years. Valued in 2019 at $47 billion in a round led by Masayoshi Son’s SoftBank, the corporate tried and didn’t go public five years ago.
The Covid pandemic caused further pain as many corporations abruptly ended their leases, and the economic slump that followed led much more clients to shut their doors.
It disclosed in an August regulatory filing that bankruptcy might be a priority.
WeWork debuted through a special purpose acquisition company in 2021 but has since lost about 98% of its value. The corporate in mid-August announced a 1-for-40 reverse stock split to get its shares trading back above $1, a requirement for keeping its Recent York Stock Exchange listing.
WeWork shares had fallen to a low of about 10 cents and were trading at about 83 cents before the stock was halted Monday.
Former co-founder and CEO Adam Neumann said that the filing was “disappointing.”
Adam Neumann, CEO of WeWork.
Eduardo Munoz | Reuters
“It has been difficult for me to look at from the sidelines since 2019 as WeWork has didn’t reap the benefits of a product that’s more relevant today than ever before,” Neumann said in an announcement to CNBC. “I think that, with the precise strategy and team, a reorganization will enable WeWork to emerge successfully.”
As recently as September, the corporate said that it had been actively renegotiating leases and that it was “here to remain.” WeWork company had near $16 billion in long-term lease obligations, in keeping with securities filings.
The corporate leases tens of millions of square feet of office space in 777 locations all over the world, in keeping with its regulatory filings.
WeWork has engaged Kirkland & Ellis and Cole Schotz as legal advisors. PJT Partners will function its investment bank, with support from C Street Advisory Group and Alvarez & Marsal.
— CNBC’s Ari Levy contributed to this report.
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