File for chapter 11 bankruptcy protection in New Jersey WeWork, a giant in the market for shared office space, with a capitalization that reached $47 billion amid the pandemic, filed after a decade of financial turmoil and in the wake of defaulting on interest payments to bondholders.
In a statement, WeWork said it has entered into a restructuring agreement with lenders that own about 93% of its secured bonds to “drastically reduce” its debt. Also, the bankruptcy filing is limited to WeWork locations in the US and Canada, while the rest will continue to operate as normal.
“WeWork has a strong foundation, a dynamic business and a bright future,” he said chief executive David Tolley;
WeWork was founded in 2010 in New York by Israeli businessman Adam Neumannwho was CEO of the fast-growing company until he was ousted nine years later.
It is one of the most spectacular examples of business failure in recent American history. Valued at $47 billion in 2019 in a funding round led by SoftBank, WeWork tried and failed to launch an initial public offering five years ago. The pandemic dealt another blow to the company, as many businesses forcibly terminated their contracts, while the ensuing economic slowdown pushed even more customers to close their doors. In August, the company warned that it was worried about the possibility of bankruptcy.
WeWork IPO via SPAC in 2021, aBut since then it has lost 98% of its value. In mid-August the company announced a 1-for-40 reverse stock split to bring its stock back above $1, which was a prerequisite to maintain its listing on the New York Stock Exchange. We WorK shares fell to a low of 10 cents and were close to 83 cents before trading was suspended yesterday.