WeWork, the office sharing company once valued at $47 billion, has filed for bankruptcy.
The company initiated the shocking Chapter 11 filing on Monday in a New Jersey court.
WeWork, which holds leases in several countries, is only seeking protections in the U.S. and Canada, CNBC reports.
Co-founded by billionaire businessman Adam Neumann and headquartered in New York, WeWork provides collaborative office areas, both physically and virtually. The company has thrived by renting out collaborative office spaces in over 700 locations worldwide for professionals and firms needing work sites. As an alternative to renting an entire office suite, WeWork offers shared spaces.
In its bankruptcy filing, WeWork listed $18.6 billion in debt and over $15 billion in assets. They are estimated to have just $45 million worth now. The collapse of the once-thriving start-up may come as a surprise to some. However, according to Tech Crunch, WeWork has been struggling to recover from a massive global expansion, which saw WeWork sign multiple long-term leases in the late 2010s. They invested a large chunk of money to renovate these locations. Unfortunately, unforeseen circumstances, such as the COVID-19 pandemic, only hurt their enterprise, as other companies and professionals no longer needed the spaces.
Neumann stepped down from his CEO position with WeWork in 2019 after he was criticized over his handling of the company’s IPO filing. He was reportedly paid $480 million for half of his remaining stake in WeWork in the company when he left. Though he is no longer with WeWork, he called the bankruptcy filing “disappointing.”
WeWork chief executive David Tolley said the corporation is now “aggressively addressing our legacy leases and dramatically improving our balance sheet.”
