The information presented originates from the esteemed news outlet, The Wall Street Journal. As per their report, WeWork is allegedly preparing to file for Chapter 11 bankruptcy in the state of New Jersey, with intentions to do so within the upcoming week.
This news may not come as a complete surprise, considering WeWork previously disclosed in their quarterly financial report that the company faced financial challenges. The report raised concerns regarding WeWork’s ability to sustain its operations. Consequently, the stock price of WeWork plummeted by more than 38% following the release of this report.
Prior to this, WeWork notified holders of its debt securities about a delay in interest payments on October 2nd, which initiated a 30-day grace period for payment. However, the company negotiated with these debt holders, successfully securing an additional 7-day extension before facing default.
The report also highlights WeWork’s recent efforts to revamp its board of directors and restructure its financial framework. The company has been engaging with landlords to negotiate new lease agreements in an attempt to reduce costs. However, as of June, WeWork only held around $205 million in cash reserves.
Representatives from WeWork have refuted comment on this report, dismissing it as mere speculation. They maintain that the company is currently focused on ongoing efforts to overhaul its financial structure.
TLDR: According to The Wall Street Journal, WeWork is reportedly planning to file for Chapter 11 bankruptcy in New Jersey within the next week. The company’s financial struggles have been evident, with a significant decrease in stock price and a delay in interest payments. WeWork has been taking steps to restructure its finances, including negotiating with landlords to decrease costs. However, they refute the claims made in the report and continue to work towards their financial transformation.