Once valued at $47 billion, office sharing company WeWork has filed for bankruptcy. The company filed for Chapter 11 bankruptcy protection earlier this week.

The bankruptcy filing is applicable to its locations in the United States and Canada. It reported total debts of $18.65 billion against total assets of $15.06 billion.

WeWork CEO David Tolley said in a press release that the company will remain committed to investing in products, services and a world class team of employees to support our community.

“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement,” said Tolley.

WeWork suffered a huge corporate collapse as it failed to get a public listing five years ago after being valued at $47 billion at its peak. The collapse was partly due to the pandemic as some companies ended their leases suddenly without much warning.

The WeWork debacle

The company lost 98% of its value. It’s founder Adam Neumann expressed disappointment about the filing.

“It has been challenging for me to watch from the sidelines since 2019 as WeWork failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”

The company said that it had been renegotiating leases since September and it was not planning on closing down.  According to security filings it has $16 billion in long-term leases.

The New York Times describes WeWork’s failure to go public as “an implosion unlike any other in the history of start-ups”. The failure is attributed to Neumann’s tenure and also the financial assistance provided by SoftBank which is led by Masayoshi Son.

With its headquarters in New York City, according to Wiki, as of December 2022, the company operated 43.9 million square feet (4,080,000 m2) of space, including 18.3 million square feet (1,700,000 m2) in the United States and Canada, in 779 locations in 39 countries, and had 547,000 members, with a weighted average commitment term of 19 months.

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Cover Photo: Wikipedia