WeWork filed for bankruptcy in the US – Kommersant
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WeWork coworking network announced, which begins the procedure for restructuring the company’s debts, and the first step in this process was filing a bankruptcy application in the New Jersey state court under Art. 11 of the US Bankruptcy Law (restructuring under protection from creditors). The company intends to file a similar application in Canada.
The initiation of bankruptcy proceedings followed by debt restructuring was agreed upon with 92% of WeWork debt holders. However, this process will not in any way affect the company’s clients and investors outside the United States and Canada, and will not affect franchisees. WeWork promises to continue serving its partners and offices as usual.
As part of the restructuring, the company intends to get rid of offices that are not used by clients in order to reduce its own costs for renting space. The company’s assets, based on the statement filed with the court, are now estimated at $15 billion, while its debt obligations are at $19 billion.
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. WeWork’s business model, mismanagement and the controversial behavior of founder Adam Neumann led to the fact that in just a couple of years the startup’s operations began to rapidly decline, and it itself suffered multimillion-dollar losses. The company held an IPO in 2021, and its initial value reached $8 billion. Now its market capitalization is only $44 million.
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