Versatile-office-space agency WeWork has filed for Chapter 11 chapter safety, a surprising change in fortune for the as soon as high-flying startup co-founded by Adam Neumann and bankrolled by SoftBank, BlackRock and Goldman Sachs.
The New York-based agency, which raised over $22 billion, has listed each property and liabilities within the vary of $10 billion to $50 billion in its petition filed in a New Jersey federal courtroom. Its chapter submitting is proscribed to areas within the U.S. and Canada, it mentioned.
WeWork India has emerged as one of many strongest models within the WeWork franchise, and is basically insulated from the chapter as majority of it’s owned by Embassy Group. The India unit makes cash and doesn’t want exterior capital to function, India head instructed native media final week.
WeWork’s preliminary public providing confronted setbacks in 2019 because of issues over losses and governance, resulting in the withdrawal of its IPO and the exit of chief government Neumann. Neumann’s departure led to a pricey settlement with WeWork and SoftBank in 2021. The corporate ultimately went public by way of a SPAC merger, valuing it at $9 billion, and forecasted $2 billion in money working revenue by 2024.
WeWork restructured its stability sheet this yr, lowering debt by $1.5 billion and delaying debt maturities to 2027. Regardless of these efforts, the agency’s market worth has plummeted to lower than $50 million, and chapter could result in the cancellation of present shareholder shares, with bonds now buying and selling at distressed ranges.
“Now could be the time for us to drag the long run ahead by aggressively addressing our legacy leases and dramatically bettering our stability sheet,” WeWork chief government David Tolley mentioned in a press release.
“We outlined a brand new class of working, and these steps will allow us to stay the worldwide chief in versatile work. I’m deeply grateful for the help of our monetary stakeholders as we work collectively to strengthen our capital construction and expedite this course of by the Restructuring Help Settlement. We stay dedicated to investing in our merchandise, companies, and world-class crew of workers to help our neighborhood.”
In its earnings disclosure in August, WeWork publicly acknowledged “substantial doubts” about its skill to proceed.
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