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WeWork’s Bankruptcy Woes: Company plans to file papers by next week, says WSJ


Troubled co-working company WeWork Inc. plans to file its Chapter 11 petition for bankruptcy in New Jersey next week, the Wall Street Journal has reported. 

The New York-based company had early success, skyrocketing to a $47 billion valuation, but the the bubble burst on scrutiny. A mismanaged initial public offering (IPO) attempt and troubles related to its co-working model during the COVID-19 pandemic set the ball rolling towards a downhill path.

Long Hours Ahead

WeWork is talking to creditors about improving balance sheets and rationalising its real estate footprint, Bloomberg reported citing the company’s regulatory filing on October 31 (Tuesday). 

Also Read: WeWork raises doublt about its survival

The company also signed a seven-days long forbearance agreement with its creditors on October 30 (Monday), it added. A company spokesperson told Bloomberg this agreement would provide “time to continue in the positive conversations with our key financial stakeholders and engage with them to implement our ongoing strategic efforts to enhance our capital structure.” 

Forbearance is a lender’s temporary approval to delay loan payments, given in place of compelling the borrower into foreclosure or default.

 The spokesperson added that WeWork has a “a clear, long-term vision for the future”, but did not respond to other queries, as per Bloomberg.


WeWork kicked-off in 2010 during the initial venture capital (VC) boom with co-founder Adam Neumann at the helm.  It raised billions and often doubled revenue year-on-year, quickly growing to a global company. It was at one point the US’ most valuable start-ups. 

Earlier in August this year, WeWork had warned it fears going bankrupt when shares crashed to near zero after the company said there’s substantial doubt about its ability to stay in business as it burns through cash. 

WeWork shares have lost nearly all of their value since its debut in October 2021. The SoftBank-backed company has been suffering with hefty losses, corporate governance lapses and the management style of then founder-CEO Adam Neumann, Reuters reported. A number of executives have left the company, including CEO Sandeep Mathrani in May and three board members in August 2023. 

Also Read: WeWork to cut 300 jobs globally as inflation weighs on workspace spending

WeWork’s business model includes taking long-term leases and renting out spaces for a short term.

The company’s net loss narrowed to $349 million in the second quarter from $577 million a year ago, but it still burned through $646 million in cash in the first six months of the year. As of the end of June, the company had $205 million cash in hand, according to the Reuters report. WeWork has never turned profitable.

Japanese conglomerate SoftBank, which is one of the major investor in WeWork, has sunk tens of billions to prop up the startup, but the company has continued to lose money.

However, WeWork’s India division said the bankruptcy warning would not affect that unit.


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Updated: 01 Nov 2023, 06:59 AM IST

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