Co-working workplace area supplier WeWork has filed for bankruptcy overlaying its places within the US and Canada, and in a filing, it mentioned it had liabilities of between $10 and $50 billion.
It’s the newest flip for a corporation that went from being valued at $47 billion in January 2019 to unsuccessfully trying an IPO later that yr.
That paperwork revealed, multi function place, the next issues: that Neumann was renting his own buildings to The We Company, that Neumann had secured loans from The We Firm, and that to vary its title to The We Firm from WeWork, the corporate paid for naming rights from… Adam Neumann. It sort of began to really feel like the purpose of The We Firm, lofty language about “elevating” one’s “consciousness” apart, was simply to give Adam Neumann money.
The corporate finally went public in 2021 through a special-purpose acquisition firm (SPAC — in case you’re not acquainted, we are able to clarify), and after combating rising money owed and hefty losses ever since, it misplaced almost 98 percent of its inventory valuation within the final yr and shares had been buying and selling at 83 cents earlier than a halt early Monday.
Within the press launch asserting its Chapter 11 submitting, the corporate says, “As a part of immediately’s submitting, WeWork is requesting the power to reject the leases of sure places, that are largely non-operational and all affected members have obtained superior discover.” The corporate says it has reached restructuring agreements with collectors holding 92 p.c of its debt.
A rise in distant working following the covid pandemic is credited as a contributing think about WeWork’s fall from monetary grace, in addition to its large operational prices.
On October thirtieth, WeWork told the US Securities and Exchange Commission that it had made agreements with collectors to briefly postpone a few of its debt funds. A Wall Street Journal report last week that WeWork meant to file for Chapter 11 chapter famous that since its founding, the corporate had amassed $16 billion in losses as of June 2023 and was nonetheless paying over $2.7 billion a yr in lease and curiosity — over 80 p.c of its complete income.
