SoftBank's WeWork, once most valuable US startup, succumbs to bankruptcy
© Reuters. FILE PHOTO: A WeWork logo is seen outside its offices in San Francisco, California, U.S. September 30, 2019. REUTERS/Kate Munsch/File Photo) Group-backed startup whose meteoric rise and fall reshaped the office sector globally, sought U.S. bankruptcy protection on Monday after its bets on companies using more of its office-sharing space soured.
A WeWork spokesperson said about 92% of the company's lenders had agreed to convert their secured debt into equity under a restructuring support agreement, wiping out about $3 billion of debt. "SoftBank will continue to act in the best long-term interests of our investors," the Japanese company said in a statementProfitability has remained elusive, as WeWork grapples with expensive leases and corporate clients cancelling because of a trend toward employees working from home. Paying for space consumed 74% of WeWork's revenue in the second quarter of 2023, the last time it reported financial results.
"WeWork could use provisions of the U.S. bankruptcy code to rid itself of onerous leases," law firm Cadwalader, Wickersham & Taft LLP said in a note to landlords on its website in August. Some landlords are bracing for a significant impact.
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