WeWork, a firm once valued at close to US$50B, seeks bankruptcy protection

globalnews.ca:

WeWork has filed for Chapter 11 bankruptcy protection, marking a stunning fall for the office sharing company once seen as a Wall Street darling that promised to upend the way people went to work around the world.

In a late Monday announcement, WeWork said it entered into a restructuring support agreement with the majority of its stakeholders to “drastically reduce” the company’s debt while further evaluating WeWork’s commercial office lease portfolio.

WeWork is also requesting the “ability to reject the leases of certain locations,” which the company says are largely non-operational, as part of the filing. Specific estimates of total impacted locations were not disclosed Monday, but all affected members have received advanced notice, the company said.

“‘Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” CEO David Tolley said in a prepared statement.

“We defined a new category of working, and these steps will enable us to remain the global leader in flexible work.”

Filings show the company is looking to get out of two leases in Toronto, two in Vancouver, and one in Burnaby, B.C. as part of its efforts to improve its balance sheet. The five Canadian locations make up a small portion of the 69 total leases it sought permission to leave early, with most in New York.

The specter of bankruptcy has hovered over WeWork for some time. In August, the New York company sounded the alarm over its ability to remain in business. But cracks had begun to emerge several years ago, not long after the company was valued as high as US$47 billion.

WeWork is paying the price for aggressive expansion in its early years. The company went public in October