WeWork, the shared office firm that was estimated to be worth $47bn (£38bn), has been compelled to file for bankruptcy protection in the US.
The verdict is the consequence of the remarkable ascent - and subsequent diminishment - of a firm which was once thought of as the embodiment of the contemporary work environment.
WeWork's filing will provide a shield from its creditors and landlords as it attempts to rearrange its enormous debts.
WeWork's current market value is now less than $50 million according to its share price.
The bankruptcy will have an impact on the company's operations in both the United States and Canada. Nevertheless, its locations remain open and operational, particularly in the UK. Additionally, the company boasts more than 700 locations worldwide, and has a membership base of approximately 730,000 individuals.
Loss-making WeWork has billions of dollars in liabilities and declared that filing for bankruptcy would enable it to "streamline its office leasing operations and concentrate on sustaining business operations".
David Tolley, WeWork's CEO, expressed his thanks for the backing of the firm's financial stakeholders as they join forces to reinforce its capital structure and hasten the restructuring agreement.
Founded in 2010, WeWork - with the flamboyant Adam Neumann at the helm - leases office spaces, enabling both individuals and businesses to rent and benefit from the shared spaces. It is well known for its interesting decor, plus for the availability of beer on tap in its offices.
The firm's co-sharing office spaces saw a decline in demand following an unsuccessful 2019 attempt to secure public funding that had a negative impact on the company's public image and resulted in the dismissal of Mr Neumann.
This was swiftly followed by the global pandemic, resulting in numerous offices across the globe to shut down with people having to carry out their work from home.
In the first half of this year, WeWork incurred a loss of more than $1bn, largely due to the cost of managing its offices and other expenditures.
The business has been making strenuous efforts to divest parts of itself and striving to close branches or discuss the conditions of permanent leases and loans.
Last month, intensifying those talks, WeWork informed investors that it wasn't fulfilling its financial obligations.
SoftBank, a Japanese technology conglomerate, invested tens of billions of dollars into WeWork despite its continual net losses.
Mr Neumann expressed disappointment as the prospect of bankruptcy for WeWork began to surface.
Mr Neumann stated that it has been hard for him to observe from the fringes since 2019 as WeWork has not seized the chance to utilize a product that has greater relevance now than ever before.
He went on to say that, given the right approach and personnel, WeWork could bounce back from the reorganisation.
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