The WeWork emblem is displayed outdoors of a shared business workplace area constructing in Los Angeles, California on August 8, 2023. Embattled office-sharing agency WeWork on August 8 warned US regulators that it’s fearful about its survival. Citing monetary losses, money wants, and a drop in memberships, WeWork mentioned in a submitting with the Securities and Alternate Fee (SEC) that “substantial doubt exists concerning the firm’s capacity to proceed as a going concern.” (Photograph by Patrick T. Fallon / AFP) (Photograph by PATRICK T. FALLON/AFP by way of Getty Photos)
Patrick T. Fallon | Afp | Getty Photos
Workplace-sharing firm WeWork filed for Chapter 11 chapter safety in New Jersey federal court docket Monday, saying that it had entered into agreements with the overwhelming majority of its secured word holders and that it meant to trim “non-operational” leases.
The chapter submitting is restricted to WeWork’s areas within the U.S. and Canada, the corporate mentioned in a press launch. The corporate reported liabilities starting from $10 billion to $50 billion, in response to a chapter submitting.
“I’m deeply grateful for the assist of our monetary stakeholders as we work collectively to strengthen our capital construction and expedite this course of by the Restructuring Assist Settlement,” WeWork CEO David Tolley mentioned in a press launch. “We stay dedicated to investing in our merchandise, companies, and world-class workforce of staff to assist our group.
WeWork has suffered one of the spectacular company collapses in latest 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 induced additional ache as many corporations abruptly ended their leases, and the financial droop that adopted led much more shoppers to shut their doorways.
It disclosed in an August regulatory submitting that chapter might be a priority.
WeWork debuted by a particular goal acquisition firm in 2021 however has since misplaced about 98% of its worth. The corporate in mid-August introduced a 1-for-40 reverse inventory break up to get its shares buying and selling again above $1, a requirement for conserving its New York Inventory Alternate 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 observe from the sidelines since 2019 as WeWork has did not make the most of a product that’s extra related at present than ever earlier than,” Neumann mentioned in an announcement to CNBC. “I imagine that, with the best technique and workforce, 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 corporate had near $16 billion in long-term lease obligations, in response to securities filings.
The corporate leases tens of millions of sq. toes of workplace area in 777 areas around the globe, in response to its regulatory filings.
WeWork has engaged Kirkland & Ellis and Cole Schotz as authorized advisors. PJT Companions will function its funding financial institution, with assist from C Avenue Advisory Group and Alvarez & Marsal.
That is breaking information. Please examine again for updates.
CNBC’s Ari Levy contributed to this report.
