co-working chain WeWork will declare bankruptcy in the coming days – Kommersant
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Co-working chain WeWork may declare bankruptcy in the next few days, it saidThe Wall Street Journal citing unnamed knowledgeable sources. According to the publication, next week a bankruptcy filing under Art. Section 11 of the US Bankruptcy Act (restructuring under creditor protection) will be filed in New Jersey state court.
WSJ notes that on October 2, interest payments on the loan for WeWork expired, after which the company began a grace period for repayment of 30 days. If WeWork fails to make payments within this period, this will automatically lead to default. The day before, the company announced the start of negotiations with creditors to obtain a deferment for another week.
Just a few years ago, the WeWork coworking network was one of the most promising startups with a valuation of $50 billion and, together with companies such as AirBnb, Uber, etc., was considered the flagship of the “sharing economy.” However, in 2019 the company started Problems. The company’s business model, mismanagement and the controversial behavior of founder Adam Neumann led to the fact that in just a couple of years, WeWork’s operations began to rapidly decline, and it itself suffered multimillion-dollar losses.
WeWork itself has not yet commented on reports of imminent bankruptcy. Back in August the company warnedwhich may not be able to continue as a going concern “given losses and projected cash requirements.”
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