WeWork, the global co-working space provider, has filed for Chapter 11 bankruptcy as part of a comprehensive reorganization plan to strengthen its capital structure and financial performance. The company aims to ensure future success by reducing its existing funded debt and expediting the restructuring process. WeWork has obtained the support of approximately 92% of its secured notes holders through a Restructuring Support Agreement.
To achieve its goals, WeWork has also initiated recognition proceedings in Canada under the Companies’ Creditors Arrangement Act. However, this process does not include WeWork’s locations outside of the United States and Canada, nor does it affect the company’s franchisees around the world.
As part of the reorganization plan, WeWork intends to reject certain lease agreements, primarily for non-operational locations, to position the company for operational and financial success. Affected members have been provided with advanced notice of these lease rejections.
David Tolley, the CEO of WeWork, expressed gratitude for the support of the company’s financial stakeholders and emphasized the importance of the WeWork community in driving its success. Tolley stated that the reorganization plan will allow WeWork to remain the global leader in flexible work by addressing legacy leases and improving its balance sheet.
WeWork has filed a series of customary First Day Motions with the court to facilitate a smooth transition and support ongoing operations. The company will continue to serve its existing members, vendors, partners, and stakeholders while the restructuring process is underway.
Kirkland & Ellis LLP, Cole Schotz P.C., PJT Partners LP, Alvarez & Marsal North America, LLC, Goodmans LLP, C Street Advisory Group, and Epiq Corporate Restructuring, LLC are serving as legal counsel, investment banker, financial and restructuring advisor, Canadian legal counsel, strategic communications advisor, and claims and noticing agent, respectively. Hilco Real Estate has been retained by WeWork to assist with lease renegotiations.
WeWork’s Chapter 11 process is expected to proceed smoothly, and the company anticipates having the necessary financial liquidity to continue business as usual. Members with questions can contact the Claims Agent, Epiq, or visit the official website for additional information.
The announcement of WeWork’s Chapter 11 filing highlights the company’s commitment to strengthening its operations, improving its balance sheet, and delivering quality services to its members. With a clear plan in place, WeWork aims to position itself for future success amidst evolving market conditions.
