Flexible office space company WeWork, once valued at $47 billion, has filed for Chapter 11 bankruptcy protection in the United States.
WeWork, humorously dubbed WeDidn’tWork by some, assured that its franchisees worldwide remain unaffected by these proceedings. The bankruptcy filing specifically pertains to WeWork’s locations in the U.S. and Canada.
In an official statement, the New York-based company outlined its strategic plan, emphasizing a deliberate approach aimed at maximizing value. WeWork intends to reject leases for specific non-operational locations, with advanced notice provided to all affected members. This move is part of their effort to position the company for operational and financial success.
“It is the WeWork community that makes us successful. Our more than half-million members around the world turn to us for the best-in-class spaces, hospitality, and technology that our 2,500 dedicated employees and valued partners provide. WeWork has a strong foundation, a dynamic business, and a bright future,” David Tolley, CEO of WeWork said.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” Tolley continued.
“We defined a new category of working, and these steps will enable us to remain the global leader in flexible work. I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community.”
WeWork was co-founded by Adam Neumann and bankrolled by SoftBank, BlackRock and Goldman Sachs.
In August, WeWork raised substantial doubt that it could continue to operate as it grappled with $2.9 billion in net long-term debt and more than $13 billion in long-term leases.
The New York-based company said in a statement it had entered into a restructuring support agreement and would deal with the debt by “addressing our legacy leases and dramatically improving our balance sheet”.
The company added that it maintains the strong support of its key financial stakeholders and has entered into a Restructuring Support Agreement with holders representing approximately 92% of its secured notes to drastically reduce its existing funded debt and expedite the restructuring process.
During this period, WeWork said it will further rationalise its commercial office lease portfolio while focusing on business continuity and delivering best-in-class services to its members, as global operations are expected to continue as usual.
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