20231107

WeWork Goes Bankrupt, Signs Pact With Creditors to Cut Debt

Former high-flying startup WeWork Inc. filed for bankruptcy listing nearly $19 billion dollar of debts, a fresh low for the co-working company that struggled to recover from the pandemic.

The New York-based company said it had struck a restructuring agreement with creditors representing roughly 92% of its secured notes and would streamline its rental portfolio of office space, according to a statement. The Nov. 6 Chapter 11 filing in New Jersey listed assets of $15 billion.

WeWork’s collapse into bankruptcy is the culmination of a years-long saga for the company, which was once the biggest office tenant in Manhattan. Its sudden rise and precipitous fall have captivated Wall Street and Silicon Valley alike.

The firm’s undoing arguably started in 2019. In a matter of months, the company went from planning an IPO to laying off thousands and procuring a multi-billion-dollar bailout.

WeWork said it intends to file recognition proceedings in Canada, though its locations elsewhere are not part of the bankruptcy process. Franchisees around the world are also not affected, and it said it would continue servicing existing members, vendors, partners, and other stakeholders as part of ordinary business.

The company eventually went public in 2021 through a combination with a special purpose acquisition company, two years after its initially planned IPO.

But that did not stop WeWork from hemorrhaging cash. A final attempt at a turnaround in March saw the company ink an out-of-court restructuring that slashed around $1.5 billion of debt and extended other maturities.

EK: Pandemics have changed work patterns including the use of office.