WeWork, the global chain of co-working spaces that was once valued at $47 billion, filed for Chapter 11 bankruptcy protection in the U.S. this month after seeing its stock price plunge by more than 98 percent this year.

It is filing for a similar status in Canada, the company said.

The company issued a statement in August that “substantial doubt exists about the company’s ability to continue as a going concern.”

In its filing, WeWork listed $15.06 billion in assets and $18.66 billion in liabilities as of 30 June.

In June, the company had 777 co-working spaces around the world, at which gig workers, entrepreneurs, and start-up companies could rent desk space, share copy machines and other equipment, and hang out and network with others in a relaxed environment.

After seeing its clients disappear during COVID lockdowns, WeWork lived on continued investments from Softbank Group, the Japanese investment giant that now owns 60 percent of the company.

In 2021, SoftBank engineered a stock offering for WeWork through a special-purpose acquisition company. The deal valued WeWork at $8 billion.

During the lockdowns, WeWork renegotiated better prices for 590 leases, cutting about $12.7 billion in annual costs. However, landlords had little incentive to cut their rates much; they already were hemorrhaging tenants and had pared back their own rental rates, which put the building owners in competition with WeWork.

After the lockdowns, WeWork marketed itself to individuals as a better alternative to working at home and to businesses as a cheaper option than maintaining conventional office space. The effort failed, leaving the company with few users and hundreds of largely empty spaces for which it continued to pay rent.

Lease payments gobbled 74 percent of WeWork’s revenue in this year’s second quarter, it said in its most recent quarterly report.

More than 90 percent of WeWork’s creditors have agreed to convert their secured debt into equity, which erases $3 billion worth of debt, the company said in a public statement.

With those agreements in place, WeWork will continue operating as usual in the U.S. and Canada. Its locations in other countries are unaffected, it said.

“As part of [the bankruptcy] filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non operational, and all affected members have received advanced notice,” the company wrote in a statement.

WeWork’s abandoned locations will burden building owners with even more empty space, as we report in “WeWork Bankruptcy Worsens Building Owners’ Plight” in this issue.

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