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WeWork has filed for Chapter 11 bankruptcy in New Jersey, embarking on a “comprehensive reorganization,” as confirmed by a statement released late Monday night.
The office-sharing firm indicated that the decision aims to reinforce its financial structure, with a restructuring support agreement in place from holders of 92 percent of its debt.
CEO David Tolley emphasized the urgency of addressing the company’s financial challenges, stating, “Now is the time for us to pull the future forward,” signaling a strategic shift to improve the company’s financials and sustain its market position in flexible workspace solutions. The restructuring will only affect WeWork’s operations in the US and Canada, as clarified in the press release.
The move follows a dramatic decrease in WeWork’s share value, which was suspended from trading on Monday. Prices of shares tumbled to below $1, a steep decline from their $400 value two years prior. Tolley had previously expressed concerns in August about the company’s ongoing viability, citing “substantial doubt” in the face of significant losses, high turnover of members, and limited liquidity.
WeWork’s attempt to go public in 2019 was postponed due to skepticism over its valuation and corporate governance, though it eventually managed to do so in 2021.