WeWork, provider of coworking office spaces has declared bankruptcy covering their locations in the US and Canada, and in a presentationIt said it had liabilities of between $10 billion and $50 billion.
That paperwork revealed, in one place, the following things: that Neumann was rent its own buildings to The We Company, that Neumann had obtained loans from The We Company, and that in order to change its name from WeWork to The We Company, the company paid naming rights to… Adam Neumann. I began to feel that the goal of The We Company, leaving aside the lofty language about “raising” one’s “consciousness,” was simply give money to Adam Neumann.
The company finally went public in 2021 via a special purpose acquisition company (SPAC; if you’re not familiar, we can explain), and after struggling with mounting debt and considerable losses since then, it lost. almost 98 percent of its share valuation over the past year and shares were trading at 83 cents before stopping early Monday.
In the press release announcing its Chapter 11 filing, the company says: “As part of today’s filing, WeWork is requesting the ability to decline leases for certain locations, which are largely non-operational and all members affected have received prior notice”. The company says it has reached restructuring agreements with creditors who hold 92 percent of its debt.
The rise in remote work following the Covid pandemic is blamed as a contributing factor to WeWork’s fall from financial grace, as well as its huge operating costs.
On October 30, WeWork told the US Securities and Exchange Commission that it had reached agreements with creditors to temporarily postpone some of its debt payments. TO Wall Street Journal report last week that WeWork intended to file for Chapter 11 bankruptcy law noted that since its founding, the company had accumulated $16 billion in losses as of June 2023 and was still paying more than $2.7 billion a year in rent and interest, more than 80 percent of their total income.