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WeWork Secures Final Court Approval for Transformational Restructuring

May 31, 2024, 08:03 AM
Filed Under: Bankruptcy

WeWork announced that its Plan of Reorganization has been confirmed by the United States Bankruptcy Court for the District of New Jersey, a final step in the Company’s operational and financial restructuring. The Company expects to emerge from Chapter 11 in mid-June, following the completion of routine administrative matters.

Nine months ago, WeWork commenced its restructuring to address its high-cost, legacy lease portfolio and dramatically reduce its corporate debt. During this period, the Company renegotiated hundreds of office leases with its landlord partners and closely collaborated with its largest creditors and other financial stakeholders. As a result of these efforts, WeWork’s approved Plan of Reorganization positions the Company to deliver sustainable, profitable growth, excellence in service delivery and innovation, and an enhanced member experience.

“Due to the tireless efforts of our team, and the unwavering loyalty of so many of our members, we have completed our Chapter 11 proceedings with success well beyond our initial expectations,” said David Tolley, Chief Executive Officer. “In one of the largest and most complex restructurings, we have achieved extraordinary outcomes. Over the last year, we have also seen strong demand across the WeWork system and increased our member net promoter scores. Each of these achievements represents an exceptional testament to our people, our brand and our industry-leading service offerings.”

A Comprehensive Operational and Financial Restructuring

Through the approved Plan, WeWork will:

  • Eliminate more than $4 billion of prepetition debt, emerging debt-free;
  • Reduce total future rent expenses by approximately $12 billion or over 50%;
  • End the substantial operating losses that characterized the Company’s years of hypergrowth and subsequent contraction;
  • Secure $400 million of new equity capital to support operating investments and future strategic growth; and
  • Operate as a private company, owned by its prepetition secured lenders.

Core Business Well Positioned to Support Members and Landlords as they Navigate through Structural Changes

Modern companies and commercial office landlords continue to navigate and adapt to evolving hybrid working patterns. WeWork is positioned to capitalize on emerging industry tailwinds and help these organizations thrive by delivering:

  • Unmatched global scale: WeWork continues to be one of the largest flexible office space providers, with a system-wide portfolio of approximately 45 million square feet in approximately 600 locations in 37 countries and 120 cities around the world.
  • Beautifully designed flexible workspaces with exceptional hospitality: WeWork offers organizations of all sizes flexibility across time, space, and cost. From intimate private offices to expansive full floors, WeWork provides thoughtfully designed, modern spaces, in-building amenities and hospitality, and a strong community that supports global enterprises, small businesses, and entrepreneurs.
  • Cutting-Edge Technology Solutions: Underpinning each WeWork location is its proprietary tech platform, driving seamless integration of building technology and streamlined bookings. Through WeWork Workplace, the Company’s space management software, organizations gain valuable and actionable insights into their workplace utilization, empowering them to optimize their workplace strategies.

“We have worked closely with the largest landlords around the world and one thing is clear: they believe in the future of the flexible office and they believe in the future of WeWork,” added Peter Greenspan, Global Head of Real Estate at WeWork. “As global office demand continues to move toward flexible approaches, only WeWork has the technology, community and data to support landlords in creating truly outstanding offerings for modern organizations. We’re grateful to each and every landlord who came to the table to collaborate with us over the past nine months, and we look forward to building on our existing partnerships far into the future.”

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