WeWork files for bankruptcy after grappling with $2.9bn in long-term debt

WeWork filed for chapter 11 bankruptcy on Monday in New Jersey, according to a statement from the company. The dizzying rise, and even more vertiginous fall, of WeWork Read more The beleaguered company, once valued at $47bn on the private market, endured a 98% decline in its share price this year, leaving it with a market capitalization of less than $50m. In August, it raised “substantial doubt” that it could continue to operate as it grappled with $2.

9bn in net long-term debt and more than $13bn in long-term leases. Shares in WeWork were suspended on Monday as Wall Street braced for it to file for bankruptcy, following reports that it was planning to do so. According to the company’s statement, it has entered a restructuring support agreement with stakeholders to drastically reduce its existing funded debt.

As part of the filing, WeWork will request the ability to reject the leases of certain, largely non-operational, locations. “We remain committed to investing in our products, services, and world-class team of employees to support our community,” said David Tolley, CEO of WeWork. “WeWork has a strong foundation, a dynamic business, and a bright future.

” The business never quite recovered from the ouster of its founder, Adam Neumann, who resigned in September 2019 amid a push to go public, and the remote work revolution of the coronavirus pandemic. skip past newsletter promotion Sign up to First Thing Free daily newsletter Our US morning briefing breaks down the key stories of the day, telling you what’s happening and why it matters Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy .

We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The attempt to list the company on the New York Stock Exchange as the We Company in 2019 included the filing of a revealing prospectus with the Securities and Exchange Commission that raised questions over its long-term viability, profitability and leadership. The company would not go public until 2021.

Neumann received a $445m payout package on his exit. Founded in 2010, the company’s business involves taking long-term leases on office buildings and selling short-term memberships to offices geared towards co-working. The company was once valued at $47bn on an investment of $12.

8bn, primarily from the Japanese multinational SoftBank. After the publication of its S-1 prospectus, however, analysts valued the company at $10bn. WeWork shuttered dozens of its co-working spaces in response to pandemic lockdowns, when remote working came to dominate co-working.

Its commercial real estate portfolio remains vast, however, with about 777 locations across 39 countries as of June. These housed 906,000 desks, according to the company. (Guardian US leases space from WeWork.

) WeWork raced to adapt to a post-Covid world, seeking to position itself as a specialist provider of flexible office space as businesses and their employees weighed how, and where, to work. It remained deep in the red, however, and lost $696m in the first half of this year. Neumann, 44, has already started a new venture.

Flow, which raised $350m from the Silicon Valley venture capital firm Andreessen Horowitz last year, is focused on residential real estate. .