Key takeaways:
- WeWork has filed for Chapter 11 bankruptcy protection in New Jersey federal court.
- The company has entered into agreements with the majority of its secured note holders and is looking to reduce its debt burden.
- WeWork’s bankruptcy filing is a stark reminder of the risks associated with investing in high-growth startups.
WeWork, the once high-flying office-sharing company, has filed for Chapter 11 bankruptcy protection in New Jersey federal court. The company was valued at $47 billion earlier this year, but has seen its fortunes decline in recent months.
WeWork said it had entered into agreements with the majority of its secured note holders and that it intended to trim “non-operational” leases. The company reported liabilities ranging from $10 billion to $50 billion, according to a bankruptcy filing.
“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement,” WeWork CEO David Tolley said in a press release.
The bankruptcy filing is limited to WeWork’s locations in the U.S. and Canada, the company said in a news release. WeWork is now in the process of restructuring its business and is looking to reduce its debt burden.
WeWork’s bankruptcy filing is a stark reminder of the risks associated with investing in high-growth startups. Despite its high valuation, the company was unable to turn a profit and its business model was not sustainable in the long run.
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