The WeWork emblem is displayed exterior of a shared business workplace house constructing in Los Angeles, California on August 8, 2023. Embattled office-sharing agency WeWork on August 8 warned US regulators that it’s anxious about its survival. Citing monetary losses, money wants, and a drop in memberships, WeWork stated in a submitting with the Securities and Alternate Fee (SEC) that “substantial doubt exists concerning the firm’s skill to proceed as a going concern.” (Photograph by Patrick T. Fallon / AFP) (Photograph by PATRICK T. FALLON/AFP through Getty Pictures)
Patrick T. Fallon | Afp | Getty Pictures
Workplace-sharing firm WeWork filed for Chapter 11 chapter safety in New Jersey federal courtroom 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 stated in a press launch. The corporate reported liabilities starting from $10 billion to $50 billion, based on 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 Help Settlement,” WeWork CEO David Tolley stated in a press launch. “We stay dedicated to investing in our merchandise, providers, and world-class workforce of workers to assist our neighborhood.
WeWork has suffered some of the spectacular company collapses in current 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 didn’t go public 5 years in the past.
The pandemic precipitated additional ache as many firms abruptly ended their leases, and the financial droop that adopted led much more purchasers 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 cut up to get its shares buying and selling again above $1, a requirement for protecting 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 stated that the submitting was “disappointing.”
“It has been difficult for me to look at from the sidelines since 2019 as WeWork has didn’t make the most of a product that’s extra related at the moment than ever earlier than,” Neumann stated in a press release to CNBC. “I consider that, with the best technique and workforce, a reorganization will allow WeWork to emerge efficiently.”
As just lately as September, the corporate stated 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, based on securities filings.
The corporate leases tens of millions of sq. ft of workplace house in 777 areas world wide, based on 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 Road Advisory Group and Alvarez & Marsal.
That is breaking information. Please verify again for updates.
CNBC’s Ari Levy contributed to this report.
