WeWork WE, the office-sharing group backed by Japan's SoftBank Group, late Monday filed for Chapter 11 bankruptcy protection, marking what could be the end of the line for what was once the country's most-valuable startup.
WeWork filed its petition with the U.S. Bankruptcy Court in New Jersey, listing assets of around $15.06 billion and liabilities of $18.66 billion.
The New York-based group will also request similar protection in Canada, as it seeks to convert billions of debt into common equity and reject hundreds of millions of dollars of leases on offices that are currently empty.
"WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational, and all affected members have received advanced notice,” the company said in a statement.
WeWork's recent prospects were hit by both the surge in hybrid and work-from-home dynamics that extended past the end of the 2020 pandemic, which significantly reduced the need for new office space; and an overreliance on small businesses and startups, which were subsequently pinched by the surge in inflation and higher interest rates that choked off their funding.
The group attempted to assuage this with a debt restructuring earlier this year, but it warned in August that it faced serious doubt as a going concern given the cost of its existing leases and the dearth of new tenants.
WeWork also put a new CEO in place, with current boss David Tolley succeeding Sandeep Mathrani, who left the group in May.
More broadly, however, the firm's fortunes changed prior to the covid outbreak, when it was valued at around $47 billion and was planning a blockbuster IPO under the leadership of its controversial founder, Adam Neumann.
WeWork shares, which traded as high as $527.20 each in October 2021, closed at 84 cents last night on the NYSE, a level that valued the group at around $44.5 million.
The stock was marked 3.9% lower in pre-market dealing to indicate an opening bell price of $46.27 each.
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