On September 25, 2020, WeWork, a real estate company known for office-sharing services, filed for Chapter 11 bankruptcy in the United States. The New York-based company had been valued at nearly $47 billion during its most recent funding round in 2019.
The filing follows a summer-long struggle to find potential new investors and renegotiate its debts. The company had been trying to secure a bailout package of up to $9 billion from SoftBank. However, negotiations reportedly hit a snag due to disagreements over the overall valuation of WeWork.
The move comes as WeWork is struggling under the burden of high rents and an ongoing coronavirus pandemic that has paralyzed office markets across the U.S. In the Chapter 11 bankruptcy filing, WeWork stated that it has about $6.3 billion in liabilities.
WeWork is now in the process of restructuring the business in an effort to return to profitability. The company has already lowered the salaries of top executives and laid off almost 3,000 employees. WeWork CEO Sandeep Mathrani has stated that the company is “determined to use the Chapter 11 process to solidify our financial position and reset the company for long-term growth and success.”