WeWork Chapter 11 Filing Highlights Challenges for Office Building Owners
Flexible office space company WeWork filed for Chapter 11 protection on November 6, 2023. More than 400 affiliates filed Chapter 11 petitions in the U.S. Bankruptcy Court in New Jersey. In its bankruptcy petition, the company listed approximately $15 billion in assets and more than $18 billion in debt, including roughly $100 million in unpaid rent.
The Chapter 11 filing highlights the challenges for office building owners exacerbated by the work-from-home shift and higher interest rates.
In a press release, the company stated that 92% of its lenders agreed to a restructuring plan that would allow WeWork to operate during the reorganization, with many dozens of locations expected to close.
"As part of today's 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," said WeWork Chief Executive David Tolley in the statement.
Chapter 11 affords a business the opportunity to "reject" or give up leases or other contracts that it considers burdensome and no longer be bound by the obligations.
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