WeWork, once the most valuable US start-up, has succumbed to bankruptcy after grappling with its expensive leases and corporate clients cancelling because some employees work from home.
Former high-flying start-up WeWork has filed for bankruptcy, marking a fresh low for the co-working company that struggled to recover from the pandemic and its failed initial public offering in 2019.
The company reported estimated assets and liabilities ranging from $US10 billion to $US50 billion, according to a bankruptcy filing, which allows WeWork to keep operating while it works out a plan to repay its debts.“WeWork could use provisions of the US bankruptcy code to rid itself of onerous leases,” law firm Cadwalader, Wickersham & Taft LLP said in a note to landlords on its website in August. Some landlords are bracing for a significant impact.
WeWork managed to amend 590 leases, saving about $US12.7 billion in fixed lease payments. But this was not enough to compensate for the fallout from the COVID-19 pandemic, which kept office workers at home.
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