WeWork’s bankruptcy caps swift downfall for $47 billion standout

Just two years after it went public, the once high-flying real estate business WeWork filed for bankruptcy without ever having figured out how to make flexible workspaces into a profitable enterprise.

It caps a wild ride for a company that began with the idea of re-imagining staid offices as fun places to hang out and grew to a behemoth worth $47 billion at its peak. A botched 2019 initial public offering and erratic behavior by co-founder Adam Neumann started WeWork’s downfall, but the company was also battered by forces outside its control — COVID-19 lockdowns and a slow return to offices that undermined demand.

The company listed $19 billion of liabilities and $15 billion of assets in its Chapter 11 filing in New Jersey on Monday. The petition allows WeWork to continue operating as it works to shore up finances. The company said it reached a restructuring deal with longtime backer SoftBank Group and existing creditors to slash over $3 billion of debt. Most shareholders will be wiped out. It never turned a profit as a public company, reporting net losses that totaled $3 billion.

Bankruptcy will also, critically, allow WeWork to cancel or renegotiate unprofitable leases at more than

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WeWork seeks bankruptcy protection in stunning fall for a company once valued close to $50 billion

NEW YORK (AP) — WeWork has filed for Chapter 11 bankruptcy protection, a stunning fall for the office-sharing company that once promised to upend the way people went to work around the world.

The filing comes at a time of incredible disruption in the commercial real estate market. The COVID-19 pandemic led to a spike in vacancies and major markets, from New York to San Francisco, are still struggling.

But it was an aggressive expansion in WeWork’s early years, that led to the bulk of its current troubles. The company went public in October 2021 after an attempt two years earlier collapsed spectacularly. The debacle led to the ouster of founder and CEO Adam Neumann, whose erratic behavior and exorbitant spending spooked early investors.

Despite efforts to turn the company around since Neumann’s departure — including significant cuts to operating costs and rising revenue — WeWork has struggled in a commercial real estate market that has been rocked by the rising cost of borrowing money, as well as a shifting dynamic for millions of office workers now checking into work remotely.

“I feel like (WeWork) has been imploding in slow motion,” said Nicole Schmidt, an attorney and managing

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What A Bankruptcy Might Mean For WeWork’s Tenants

According to a story posted in the Wall Street Journal on August 24, several owners of WeWork’s secured debt totaling $1.2 billion are holding what were called “preliminary talks about the company’s restructuring options and indicated that they would support a plan for WeWork to file for chapter 11 bankruptcy.” However, the creditors who include BlackRock, King Street Capital and Brigade Capital, have not yet provided specific proposals concerning a bankruptcy or debt restructuring to WeWork, as per sources that were not identified.

What does this news mean for WeWork tenants, known as members? This is a long run prospect. Nobody knows exactly what will happen, and we are just at the start of a process that will have many twists and turns. However, let’s take a look at what might happen if a bankruptcy plan is negotiated with WeWork’s secured creditors by working through some of the alternatives if WeWork tries to reorganize as an ongoing company. To do so I consulted Eric Haber, general counsel for my firm Wharton Property Advisors who is also a bankruptcy attorney.

A Potential Bankruptcy Scenario

Under a potential bankruptcy reorganization plan,

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