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Flexible office - outer space house WeWork has filed for Chapter 11 bankruptcy protection , listing over $ 18.6 billion of debt in a remarkable collapse for the once high - flee inauguration co - founded by Adam Neumann and bankrolled by SoftBank , BlackRock and Goldman Sachs .
The New York – based house , which raised over $ 22 billion and was prize at $ 47 billion at its peak , has listed assets of over $ 15 billion in the request it filed in a New Jersey federal court .
WeWork chief administrator David Tolley say about 90 % of the company ’s lender have agreed to win over their $ 3 billion of debt into fairness . “ Now is the time for us to pull the future frontwards by aggressively addressing our legacy lease and dramatically meliorate our balance tabloid , ” he say in a statement .
WeWork ’s bankruptcy filing is limited to location in the U.S. and Canada , it said .
WeWork India has emerged as one of the strongest units in the WeWork franchise and is for the most part insulated from the bankruptcy as a majority of it is owned by Embassy Group . The India unit makes money and does n’t take external capital to function , the India head said in a statement today .
WeWork is grapple with the side effect from a catamenia of fast-growing growth and global expansion that resulted in a portfolio of many underperforming property . Its real - estate footprint span across 777 emplacement in over 39 countries as of earlier this twelvemonth .
“ WeWork has a deliberate and value maximizing rental rejection design that is expected to position the troupe for useable and fiscal success . As part of today ’s filing , WeWork is call for the ability to reject the leases of certain position , which are largely non - operable and all feign members have have advance observation , ” it say in ablog post .
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The company signed farseeing - term leases during the market ’s peak in the late 2010s , refurbishing these locations and subsequently leasing them out on terms as short as one month . The business firm ’s strategy met with substantial challenges as the pandemic gnaw at demand for deal workspace , leading to increased void and continued fiscal obligation to landlord amount to billions of dollar mark in split .
WeWork ’s initial public offering faced reversal in 2019 due to vexation over losses and government activity , leading to the onanism of its IPO and the outlet of chief executive Neumann . Neumann ’s departure chair to a costly small town with WeWork and SoftBank in 2021 . The company eventually go public via a SPAC unification , valuing it at $ 9 billion , and forecasted $ 2 billion in John Cash operating lucre by 2024 .
SoftBank , which teem over $ 16 billion into WeWork over the years , owns over 65 % equity in the office - space house , according to WeWork ’s petition .
Neumann scream WeWork ’s bankruptcy filing “ disappointing . ” In a assertion Monday , he said : “ It has been challenging for me to look on from the hobby since 2019 as WeWork has go to take vantage of a product that is more relevant today than ever before . I believe that , with the veracious scheme and squad , a reorganization will enable WeWork to go forth successfully . ”
WeWork restructured its balance sheet this year , repress debt by $ 1.5 billion and delaying debt maturities to 2027 . Despite these efforts , the firm ’s market value has plummet to less than $ 50 million , and bankruptcy may lead to the cancellation of existing shareowner shares , with James Bond now trading at stressed tier .
“ We defined a new family of workings , and these steps will enable us to remain the spherical leader in compromising work . I am deeply grateful for the support of our financial stakeholder as we puzzle out together to beef up our capital letter social structure and expedite this process through the Restructuring Support Agreement . We remain committed to investing in our products , service , and world - class team of employee to support our biotic community , ” said Tolley .
In its earnings revelation in August , WeWork publicly recognise “ substantial doubts ” about its ability to continue .
