Once a Darling, WeWork Has Now Filed for Bankruptcy

Sources had indicated move was imminent
By Evann Gastaldo,  Newser Staff
Posted Nov 1, 2023 12:27 AM CDT
Updated Nov 7, 2023 12:00 AM CST
WeWork Plans to File for Bankruptcy: Sources
A sign for WeWork is displayed at the workspace-sharing office in Manhattan, New York, Aug. 9, 2023.   (AP Photo/Ted Shaffrey, File)
UPDATE Nov 7, 2023 12:00 AM CST

As sources indicated last week that it would, a onetime darling of the startup world on Monday filed for Chapter 11 bankruptcy protections in federal court. The coworking company WeWork, which has long been struggling, isn't quite ready to throw in the towel: "Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet," says the CEO in a news release cited by CNN. As opposed to a Chapter 7 bankruptcy, in which a company is liquidated, Chapter 11 involves restructuring instead, per Debt.org. The company's controversial co-founder and ousted CEO mentioned that in his own comment on the matter to CNBC: "It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully."

Nov 1, 2023 12:27 AM CDT

Once valued at $47 billion, WeWork is now on the brink of bankruptcy, sources say. Founded in 2010, the office-sharing venture was already struggling when its controversial co-founder and CEO was ousted in 2019. The COVID pandemic soon followed, and with it a significant shift to remote work; the Guardian notes the company never recovered from that series of events. The sources who spoke to the Wall Street Journal say the company is considering filing a Chapter 11 petition as soon as next week. Amid ongoing struggles and doubts about whether it could maintain operations, multiple top execs left the company this year, including Sandeep Mathrani, who took over as CEO in 2020 after the aforementioned ouster and left this past May.

The company went through $530 million in the first half of the year and had about $205 million in cash on hand by June, according to securities filings. Starting in the second half of this year through the end of 2027, it has an estimated $10 billion in lease obligations due, and another $15 billion starting in 2028. It missed interest payments owed to bondholders earlier this month and the 30-day grace period in which it must either make the payments or default is coming to an end, but on Tuesday, WeWork said it had a deal with bondholders for an additional seven days to negotiate. The company would not comment on what it called "speculation" about bankruptcy discussions. (More WeWork stories.)

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