The move, which could come as soon as next week, would mark a stunning reversal for the flexible-office-space venture that was once valued at $47 billion.
WeWork is planning to file for bankruptcy as early as next week, according to people familiar with the matter, in what would mark a stunning reversal for the flexible-office-space venture that was once valued at $47 billion.
New York-based WeWork is considering filing a chapter 11 petition in New Jersey, the people said.
WeWork missed interest payments owed to its bondholders on Oct. 2, kicking off a 30-day grace period in which it needs to make the payments. Failing to do so would be considered an event of default. On Tuesday, the company said it has struck an agreement with the bondholders to allow it another seven days to negotiate with the stakeholders before a default is triggered.
WeWork declined to comment on what a spokesperson called “speculation.” The spokesperson also pointed to a securities filing early Tuesday that “the forbearance agreement provides time to continue in the positive conversations with our key financial stakeholders and engage with them to implement our ongoing strategic efforts to enhance our capital structure.”
In August, the company shook up its board after three directors resigned due to a material disagreement regarding board governance and the company’s strategic direction, according to a securities filing. WeWork appointed four new directors with expertise in large, complex financial restructurings. Those directors have been negotiating with WeWork’s creditors over the past several months about a restructuring plan as they prepare for the bankruptcy.
The flexible-workspace provider has been aiming to renegotiate leases with landlords after signaling that it has substantial doubt about its prospects for survival. Chief Executive David Tolley said during a September conference call with landlords that WeWork’s lease commitments must be “right-sized” to accommodate its operations in the current market because the office real-estate market has fundamentally changed.
As of June, WeWork maintained 777 locations across 39 countries, including 229 locations in the U.S., according to securities filings. WeWork has an estimated $10 billion in lease obligations due starting from the second half of this year through the end of 2027 and an additional $15 billion starting in 2028, according to public filings.
The company burned through $530 million during the first six months of 2023 and had around $205 million of cash on hand as of June, according to securities filings.
WeWork was once a darling of the venture-capital world, but its performance has fallen short of the lofty expectations investors once ascribed to it. The company’s co-founder Adam Neumann was ousted in 2019 after investors raised concerns about his unorthodox management style and related-party transactions with the company. WeWork went public in 2021 through a merger with a special-purpose acquisition company after earlier plans for an initial public offering were scrapped.
Eliot Brown and Alexander Saeedy contributed to this article.