New York: WeWork, the SoftBank Group-backed startup whose meteoric rise and fall reshaped the office sector globally, sought U.S. bankruptcy protection on Monday, after its bets on companies using more of its office-sharing space soured.
The New York-based company listed both assets and liabilities in the range of $10 billion to $50 billion in a Chapter 11 petition filed in New Jersey. The filing allows WeWork to keep operating while it works out a plan to repay its debts.
The company reached a sweeping debt restructuring deal in early 2023, but quickly fell into trouble again. It said in August that there was “substantial doubt” about its ability to continue operating. Weeks later, it said it would renegotiate nearly all its leases and withdraw from “underperforming” locations.
WeWork’s real estate footprint sprawled across 777 locations in 39 countries as of June 30, with occupancy near 2019 levels. But the enterprise remains unprofitable.
The company went public in 2021 through a combination with a special purpose acquisition company, two years after its planned IPO was infamously scuttled amid investor concerns about the company’s governance, valuation and growth prospects. The failed deal led to founder Adam Neumann’s resignation as chief executive officer and led to a dramatic slide in WeWork’s valuation, which once stood as high as $47 billion.
Other shared office space firms have also stumbled after the pandemic upended working habits. Knotel Inc. and subsidiaries of IWG Plc sought bankruptcy in 2021 and 2020, respectively.
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