Office rental company WeWork has applied for a deferment of payment in the US. The company has started a so-called Chapter 11 procedure. This is evident from a bankruptcy filing in federal court in New Jersey.
WeWork would like to try to make a restart, which is possible under Chapter 11 proceedings, because it would give the company legal protection against its creditors and more opportunities to negotiate with landlords.
In 2019, WeWork was the most expensively valued start-up ever with a value of $47 billion, but shortly afterwards the company went downhill rapidly. A planned IPO was canceled because the books showed that the company was making enormous losses. The decline in demand for office space during the corona crisis caused WeWork even further problems.
In August it lost a third of its stock market value in one day and was suddenly worth less than 300 million. The company reported last week The Wall Street Journal that the company had defaulted on an interest payment to bondholders on October 2.
WeWork was founded in 2010 and rents office space in 39 countries. In June, the company claimed to have about 730,000 members.