| WeWork, the SoftBank Group-backed startup whose meteoric rise and fall reshaped the office sector globally, sought US bankruptcy protection on Monday , after its bets on companies using more of its office-sharing space soured.
“WeWork could use provisions of the US 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.WeWork grew to be the most valuable US startup, worth $US47 billion. It attracted investments from blue-chip investors, including SoftBank and venture capital firm Benchmark, as well as the backing of major Wall Street Banks, including JPMorgan Chase.
WeWork managed to amend 590 leases, saving about $US12.7 billion in fixed lease payments. But this was not enough to compensate for the fallout from the COVID-19 pandemic, which kept office workers at home.
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WeWork files for bankruptcy amid office market downturnThe flexible-office-space venture, valued at $US47 billion at its peak, is facing the consequences of excessive expansion that left it with unprofitable leases.
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