Coworking office space provider WeWork filed for bankruptcy covering its locations in the United States and Canada, and in a depositit reported having liabilities of between $10 billion and $50 billion.
These documents revealed, in one place, the following: that Neumann was rent its own buildings to The We Company, that Neumann had obtained loans from The We Company, and that to change its name to The We Company from WeWork, the company paid the naming rights of… Adam Neumann. We sort of started to think that the purpose of The We Company, the lofty language about “raising” one’s “consciousness”, was simply to give money to Adam Neumann.
The company ultimately went public in 2021 via a special purpose acquisition company (SPAC — if you’re unfamiliar, we can explain), and after struggling ever since with mounting debts and heavy losses, it lost almost 98 percent of its stock’s valuation over the last year and shares were trading at 83 cents before a halt early Monday.
In the press release announcing its Chapter 11 filing, the company states: “As part of today’s filing, WeWork is seeking the opportunity to reject leases for certain locations, which are largely non-operational and all affected members received notice. » The company says it has reached restructuring agreements with creditors holding 92 percent of its debt.
The increase in remote working following the Covid pandemic is seen as a contributing factor to WeWork’s fall from financial grace, as well as its enormous operational costs.
On October 30, WeWork told the U.S. Securities and Exchange Commission that it had reached agreements with its creditors to temporarily defer certain repayments of its debt. A Wall Street Journal report last week that WeWork intended to file for Chapter 11 bankruptcy indicated that since its inception, the company had accumulated $16 billion in losses as of June 2023 and was still paying more than $2.7 billion annually in rent and interest, or more than 80% of its total income.