WeWork (WE) filed for Chapter 11 bankruptcy on Monday. The office-sharing company was valued at $47 billion in 2019. It failed in its initial attempt to go public, and former co-founder and CEO Adam Neumann was asked to step down. In 2021, the company went public through a special purpose acquisition company (SPAC). In November 2023, WeWork filed for bankruptcy protection in New Jersey federal court.
In a press release, WeWork said that the Chapter 11 filing is limited to the company’s locations in the U.S. and Canada. An initial filing stated that the company’s liabilities ranged from $10 billion to $50 billion.
Earlier in August, the company indicated that it could file for bankruptcy in a regulatory filing. In mid-August WeWork announced a 1-for-40 reverse stock split. This was required to get its shares to trade above $1. The New York Stock Exchange requires stocks to trade above this level for them to be listed on the exchange.
Shares of WeWork fell to a low of about 10 cents. They were trading at roughly 83 cents before the halting of the stock on Monday.
A press release from WeWork also stated that 92 percent of its secured debt holders were in agreement with the co-working space provider’s restructuring plan, which is expected to wipe out roughly $3 billion of its debt. WeWork will also cut down on leases for commercial offices.
The bankruptcy filing stated that the company’s assets are worth roughly $15 billion, while its debts total $18.6 billion.
According to the filing, WeWork must pay about $100 million in unpaid rent as well as lease termination fees but the company disputes some of the claims.
Co-founder and former CEO Adam Neumann, who was asked to leave WeWork due to his controversial management style, called the filing “disappointing” and more.
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