WeWork files for bankruptcy protection.
WeWork, once a high-flying startup backed by SoftBank, filed for U.S. bankruptcy protection due to its struggles with costly leases and remote work trends. The move signals that SoftBank, which owns a majority of WeWork, sees renegotiating leases in bankruptcy as essential. The company intends to reduce its debt significantly and is pursuing recognition proceedings in Canada while its international locations and franchisees remain unaffected. WeWork’s shares have plummeted this year, profitability has remained elusive, and the company faces substantial liabilities. Many of its smaller business clients have cut spending, and competition from traditional landlords offering short-term leases exacerbated its troubles. WeWork’s bankruptcy marks a dramatic fall from its peak valuation of $47 billion. The company attempted debt restructurings but ultimately had to file for bankruptcy. David Tolley succeeded Sandeep Mathrani as CEO earlier this year. The company secured a seven-day extension for interest payment negotiations with creditors just before filing for bankruptcy. Adam Neumann, WeWork’s founder, expressed hope that a successful reorganization could help the company emerge from its current difficulties.
