WeWork announced today that the United States Bankruptcy Court for the District of New Jersey has confirmed its Plan of Reorganization, marking the final step in the company’s operational and financial restructuring.
The company anticipates emerging from Chapter 11 in mid-June after completing routine administrative tasks.
Nine months ago, WeWork initiated its restructuring to address its high-cost, legacy lease portfolio and significantly reduce its corporate debt.
Throughout this period, the company renegotiated hundreds of office leases with landlords and collaborated closely with its largest creditors and other financial stakeholders.
These efforts have culminated in the approval of WeWork’s Plan of Reorganization, positioning the company for sustainable, profitable growth, enhanced service delivery, and an improved 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,” he added.
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.
“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.”
