WeWork, the office share company backed by Softbank Group, has filed for Chapter 11 bankruptcy protection in New Jersey federal court. The once highly valued company with a worth of $47 billion reported liabilities ranging from $10 billion to $50 billion in its filing.
Despite securing two extensions last month to make required interest payments to bondholders, WeWork was unable to do so and is now limited only to locations in the U.S. and Canada under this bankruptcy filing.
Accordingly, WeWork CEO David Tolley expressed his gratitude for the support of financial stakeholders as they work together towards strengthening their capital structure through a Restructuring Support Agreement.
The downfall of WeWork marks an astonishing decline following significant investments from major investors such as Japan’s Softbank, Goldman Sachs and BlackRock. However, over time the company’s operating expenses increased drastically leading them into reliance on cash infusions from private investors.
In August 2019, WeWork warned about potential difficulties surviving due financial struggles and lack of capital which could potentially lead them into insolvency within a year. Additionally,the high member turnover rate was also cited as one reason contributing towards their current situation.
At its peak in June 2020 ,We Work occupied approximately 20 million square feet making it one Manhattan’s largest office tenants since Adam Neumann founded it back April 2011.However,in September he was ousted after serving both founder & CEO roles at Wework .
