Co-working office space provider WeWork has filed for bankruptcy for its locations in the US and Canada, and in a filing it said it had debts of between $10 billion and $50 billion.
It’s the latest twist for a company that went from a $47 billion valuation in January 2019 to a failed IPO later that year.
That paperwork revealed the following things in one place: that Neumann was leasing his own buildings to The We Company, that Neumann had received loans from The We Company, and that in order to change the name to The We Company from WeWork, the company paid for naming rights by…Adam Neumann. It started to feel a bit like the point of The We Company, lofty language about “elevating” your “consciousness,” was just to make Adam Neumann money.
The company eventually went public in 2021 through a special purpose acquisition company (SPAC – if you’re not familiar with it, we can explain), and after struggling with mounting debt and hefty losses since then, it lost nearly 98 percent of its stock valuation. in the past year and shares traded at 83 cents before halting early Monday.
In the press release announcing the Chapter 11 filing, the company said: “As part of today’s filing, WeWork is requesting the ability to deny the leases of certain locations, which are largely non-operational and have all affected members receive prior notice.” The company says it has reached restructuring agreements with creditors holding 92 percent of the debt.
An increase in remote working following the Covid pandemic is seen as a contributing factor to WeWork’s fall from financial grace, as well as its huge operating costs.
On October 30, WeWork told the U.S. Securities and Exchange Commission that it had reached agreements with creditors to temporarily defer some debt payments. a Wall Street Journal Last week’s report that WeWork planned to file for bankruptcy noted that the company had incurred $16 billion in losses since its founding in June 2023 and is still making more than $2.7 billion a year in rent and interest paid – more than 80 percent of his total assets. gain.