WeWork plans to file for bankruptcy, WSJ reports

As early as next week, WeWork Inc. may be filing for bankruptcy. This comes after a forbearance agreement it entered into with creditors on Monday. According to the Wall Street Journal, this agreement will end after 7 days.In a company statement, a spokesperson said that WeWork had been “positively engaged” with its financial stakeholders and needed the time to “enhance its capital structure.” The statement added that WeWork had a “clear, long-term vision for the future.”The downfall of WeWork was nothing short of astonishing, given its meteoric rise. Just a decade ago, the co-working company, led by the charismatic Adam Neumann, had already doubled its revenues and achieved a spectacular US$47 billion valuation. Additionally, WeWork indulged in a variety of side projects, such as the WeGrow private elementary school, two residential buildings called WeLive, and a gym concept called Rise By We.For now, it looks as though WeWork’s bankruptcy filing may take place in New Jersey. Despite this, many remain unaffected, as evidenced by CICT and CDL’s confirmation that they remain unaffected by the company’s bankruptcy warning.WeWork’s rapid ascent and fall from grace is certainly one of the most dramatic trajectories of the last startup boom. Having raised billions of dollars, operated offices around the world, and invested in a variety of ancillary projects, its rocky path looks set to end with a Chapter 11 bankruptcy filing. WeWork has said that it holds a “clear, long-term vision for the future” – but it remains to be seen how this will be realised.

As early as next week, WeWork Inc. may be filing for bankruptcy – following a forbearance agreement it entered into with creditors on Monday. This news comes after the company had one of the most dramatic trajectories of the last startup boom – achieving a US$47 billion valuation before a disastrous initial public offering and the coronavirus pandemic threatening its co-working model.

In a statement, WeWork said it had been actively discussing its balance sheet with creditors, as well as taking steps to “rationalize its real estate footprint.” A spokesperson for the company also said that it holds a “clear, long-term vision for the future”, but refused to comment on speculation.

WeWork’s journey to bankruptcy began back in 2010, just as the venture capital market was beginning a long-term boom. With its co-founder Adam Neumann at the helm, the company quickly raised billions of dollars and rapidly expanded – even launching a variety of side projects, including WeGrow private elementary school, two WeLive residential buildings, and the Rise By We gym concept.

At its peak, WeWork was one of the most valuable startups in the US and had offices all over the world. Unfortunately, its rapid ascent was not enough to protect it from the pandemic-related challenges to its co-working model – and it looks as though its rocky path is set to end with a Chapter 11 bankruptcy filing, likely to take place in New Jersey when the forbearance agreement ends in seven days.

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Despite this, CICT and CDL had both signed off on the company’s warning and confirmed that the bankruptcy filing would not affect them. Nonetheless, WeWork’s fallout is still one of the most dramatic stories of the last startup boom – showing the extreme highs and deep lows of investing in the industry.