WeWork plans to file for bankruptcy in the hopes that having less debt and locations will revitalise the company. Founded in 2010 and originally heralded as the future of the workplace, the firm that leases out shared office spaces experienced financial losses during its rapid worldwide development. Due to the pandemic-induced dramatic decline in the market for office space, it filed for bankruptcy last year.

Since then, the business has worked with its lenders and renegotiated the terms of its rental leases under court protection. WeWork has stated that following its bankruptcy, it intends to manage 337 shared office spaces worldwide, which is roughly half of the total as of June 2023.

Its largest markets will continue to be the US and Canada, with over 170 locations, 

According to WeWork, the proposal that was accepted on Thursday by a bankruptcy court in New Jersey also wipes out $4 billion in business debt and lowers the company’s future rent commitments by $12 billion, or more than half.

A new owner, Yardi Systems, which provides software to commercial and residential landlords, is another change. In return for co-investing $450 million in the company, the firm is assuming a controlling share in it.

SoftBank Group of Japan is still a supporter.

Judge John Sherwood approved the plan, stating that the restructure will make the corporation “a viable, successful company”.

WeWork stated that by mid-June, the reorganisation should be finished.

The agreement was approved a few days after former WeWork CEO Adam Neumann said his attempt to acquire the firm would not proceed.

He stated at the time that he did not believe WeWork’s approach would set it up for success.

In 2019, a private financing round valued the firm at about $50 billion, and he allegedly made an offer of $500 million for it.

After an unsuccessful attempt to increase capital by putting shares on the stock market disclosed the extent of the firm’s losses and prompted doubts about his leadership, Neumann departed the company.

The scandal served as the basis for the Apple TV comedy WeCrashed, which starred Anne Hathaway and Jared Leto.

(Adapted from CoStar.com)