WeCrashed - WeWork Files for Chapter 11 Bankruptcy

Big business news today! WeWork has filed for Chapter 11 Bankruptcy in the USA to help it deal with a mountain of debt. WeWork expanded rapidly post 2010 and spent billions acquiring leases on office-space properties around the world. But everything changed post-pandemic and what seems like a permanent shift to hybrid working. Office occupancy rates have tumbled, revenues for the business have stalled, debt has grown and losses have mounted. Their stock is now down 99.8% since the Initial Public Offering and is officially below $1 a share.

More here from the Guardian: WeWork, once a $47bn firm, files for bankruptcy after accruing $2.9bn debt

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a form of bankruptcy protection that allows a company to reorganise its debts and restructure its business while continuing to operate. It's different from Chapter 7 bankruptcy, which is a complete liquidation of the company's assets. In Chapter 11, the company can propose a restructuring plan, which must be approved by a majority of creditors and the bankruptcy court. If the plan is approved, the company can continue operating while repaying its debts over time. This process can allow a company to shed some of its debt and emerge as a leaner, more profitable business. But it also means that the company's creditors may not be paid in full, and that shareholders may lose some or all of their investment. In the case of WeWork, Chapter 11 bankruptcy is allowing the company to try to turn things around after a period of rapid expansion and financial mismanagement.