WeWork, the embattled co-working space provider, has announced plans to emerge from bankruptcy by the end of May, with lease-restructuring efforts expected to bring $8 billion in future rental savings. The New York-based company filed for Chapter 11 bankruptcy in November, citing high rental liabilities as a major operating cost.
In an update on Tuesday, WeWork revealed that it had made significant progress in renegotiating leases at 90% of its 500 wholly owned locations worldwide, resulting in agreements to amend or reject leases. Additionally, the company reached an agreement with holders representing 92% of its secured notes to eliminate over $3 billion in debt obligations.
Throughout the bankruptcy proceedings, WeWork made headlines for withholding rent payments to landlords as it sought to renegotiate leases, sparking legal battles with some landlords who claimed the actions violated bankruptcy rules. The company first announced plans to renegotiate leases in September, following concerns over its ability to stay in business due to increased member churn and financial losses.
WeWork’s troubles can be traced back to its aggressive expansion in its early years, leading to a failed attempt at going public in 2019 and the ouster of founder and CEO Adam Neumann. SoftBank, a Japanese conglomerate, stepped in to acquire majority control of the company and keep it afloat.
With a clear path forward and significant debt reduction, WeWork is now poised to emerge from bankruptcy and continue its operations in the competitive co-working space industry.