The WeWork logo is displayed outside a shared commercial building in Los Angeles, California on August 8, 2023. Beleaguered office sharing company WeWork warned US regulators on August 8 that it was concerned about its survival. Citing financial losses, cash needs and declining membership, WeWork said in a filing with the Securities and Exchange Commission (SEC) that “there is significant doubt about the company’s ability to continue as a going concern.” (Photo by Patrick T. Fallon/AFP) (Photo by Patrick T. Fallon/AFP via Getty Images)
Patrick T. Fallon | AFP | Getty Images
Office-sharing company WeWork filed for Chapter 11 bankruptcy protection in New Jersey federal court on Monday, saying it has entered into agreements with the vast majority of secured noteholders and that it intends to reduce its “non-operating” leases.
The bankruptcy filing is limited to WeWork locations in the United States and Canada, the company said in a press release. The company announced liabilities ranging from $10 billion to $50 billion, according to the bankruptcy filing.
“I am extremely grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and accelerate this process through a restructuring support agreement,” WeWork CEO David Tolley said in a press release. “We are committed to investing in our products, services and global employee team to support our community.
WeWork has suffered one of the most spectacular corporate collapses in modern US history over the past few years. In 2019, it was valued at $47 billion in a round led by Masayoshi Son’s SoftBank, and the company tried and failed to go public five years ago.
The pandemic caused further pain as many businesses abruptly ended their leases, and the ensuing economic recession led to more customers closing their doors.
It revealed in an August regulatory filing that bankruptcy could be a concern.
WeWork debuted through a special purpose acquisition company in 2021 but has since lost about 98% of its value. The company in mid-August announced a 1-for-40 reverse stock split to get its shares back trading above $1, a condition of maintaining its listing on the New York Stock Exchange.
WeWork shares fell to a low of about 10 cents and were trading at about 83 cents before the stock was halted on Monday.
Former CEO and co-founder Adam Neumann said the filing was “disappointing.”
“It has been difficult for me to watch from the sidelines since 2019 as WeWork has failed to capitalize on a product that is more important today than ever before,” Neumann said in a statement to CNBC. “I believe that with the right strategy and team, the reorganization will enable WeWork to emerge successfully.”
Last September, the company said it was actively renegotiating its leases and that it was “here to stay.” The company had approximately $16 billion of long-term lease obligations, According to securities filings.
The company leases millions of square feet of office space in 777 locations around the world, according to its regulatory filings.
WeWork has appointed Kirkland & Ellis and Cole Schotz as legal advisors. PJT Partners will serve as its investment bank, with support from C Street Advisory Group and Alvarez & Marsal.
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CNBC’s Ari Levy contributed to this report.
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