WeWork, once valued at  billion, files for bankruptcy
WeWork, once valued at  billion, files for bankruptcy

The WeWork emblem is displayed exterior of a shared industrial workplace house constructing in Los Angeles, California on August 8, 2023. Embattled office-sharing agency WeWork on August 8 warned US regulators that it’s frightened about its survival. Citing monetary losses, money wants, and a drop in memberships, WeWork mentioned in a submitting with the Securities and Exchange Commission (SEC) that “substantial doubt exists concerning the firm’s means to proceed as a going concern.” (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP by way of Getty Images)

Patrick T. Fallon | Afp | Getty Images

Office-sharing firm WeWork filed for Chapter 11 bankruptcy safety in New Jersey federal courtroom Monday, saying that it had entered into agreements with the overwhelming majority of its secured notice holders and that it meant to trim “non-operational” leases.

The bankruptcy submitting is restricted to WeWork’s places within the U.S. and Canada, the corporate mentioned in a press launch. The firm reported liabilities starting from $10 billion to $50 billion, in line with a bankruptcy submitting.

“I’m deeply grateful for the help of our monetary stakeholders as we work collectively to strengthen our capital construction and expedite this course of via the Restructuring Support Agreement,” WeWork CEO David Tolley mentioned in a press launch. “We stay dedicated to investing in our merchandise, companies, and world-class crew of workers to help our neighborhood.

WeWork has suffered one of the spectacular company collapses in current U.S. historical past over the previous few years. Valued in 2019 at $47 billion in a spherical led by Masayoshi Son’s SoftBank, the corporate tried and did not go public 5 years in the past.

The pandemic triggered additional ache as many firms abruptly ended their leases, and the financial stoop that adopted led much more shoppers to shut their doorways.

It disclosed in an August regulatory submitting that bankruptcy could be a concern.

WeWork debuted via a special purpose acquisition company in 2021 however has since misplaced about 98% of its worth. The firm in mid-August announced a 1-for-40 reverse inventory break up to get its shares buying and selling again above $1, a requirement for preserving its New York Stock Exchange itemizing.

WeWork shares had fallen to a low of about 10 cents and had been buying and selling at about 83 cents earlier than the inventory was halted Monday.

Former CEO and co-founder Adam Neumann mentioned that the submitting was “disappointing.”

“It has been difficult for me to look at from the sidelines since 2019 as WeWork has did not make the most of a product that’s extra related as we speak than ever earlier than,” Neumann mentioned in a press release to CNBC. “I imagine that, with the suitable technique and crew, a reorganization will allow WeWork to emerge efficiently.”

As just lately as September, the corporate mentioned it had been actively renegotiating leases and that it was “right here to remain.” The firm had near $16 billion in long-term lease obligations, according to securities filings.

The firm leases tens of millions of sq. toes of workplace house in 777 places world wide, in line with its regulatory filings.

WeWork has engaged Kirkland & Ellis and Cole Schotz as authorized advisors. PJT Partners will function its funding financial institution, with help from C Street Advisory Group and Alvarez & Marsal.

This is breaking information. Please test again for updates.

CNBC’s Ari Levy contributed to this report.

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