WeWork, the Softbank Group-backed office share company, filed for Chapter 11 bankruptcy protection in New Jersey federal court on Monday. The company, once valued at $47 billion, reported liabilities ranging from $10 billion to $50 billion, according to the filing.
Last month, the company failed to make required interest payments to bondholders, but secured two extensions that extended the deadline to today. The bankruptcy filing is limited to WeWork’s locations in the U.S. and Canada.
“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement,” WeWork CEO David Tolley said.
WeWork’s demise caps an astonishing drop following a flood of venture capital money from Japan’s Softbank, Goldman Sachs, BlackRock, and other major investors. Over time, its operating expenses skyrocketed, and the company became increasingly reliant on cash infusions from private investors.
WeWork warned in August that it might not be able to survive the following year due to reasons such as financial difficulties and a lack of capital. The company also stated that it has a high member turnover rate.
Once one of Manhattan’s largest office tenant, WeWork was utilizing approximately 20 million square feet of office space as of June.
Adam Neumann, the former WeWork founder and CEO, founded the startup in April 2011. He was ousted in September of 2019.