Flexible office operator WeWork has filed for Chapter 11 bankruptcy in the US, in a process which allows the firm to terminate leases early in North America with reduced financial penalty.
The troubled firm, which has been battling profitability issues due to expensive, long-term leases signed before the pandemic, has requested to exit 69 sites across the US and Canada and said it was in 'active negotiations' with another 400 property owners to alter lease terms.
WeWork said that its international business, including sites in Europe, would not be affected by the New Jersey court order. WeWork currently operates more than 110 co-working spaces in Europe including the UK.
At the end of October, London-based developer Helical evicted WeWork from six floors of the Bower building on Old Street due to non-payment of rent for the September quarter.
WeWork was allowed back into the building after signing a short-term lease and paying all of the outstanding rent and fees.
The company lost $696 mln (€653 mln) in the first six months of the financial year to 30 June.
The firm's chief executive, David Tolley, said that the firm could now focus on 'addressing legacy leases and dramatically improving our balance sheet'.
The once feted WeWork was valued at $47 bn by major investor SoftBank in 2019 on the eve of its planned IPO. But the flrm was forced to scrap the 2019 float as holes emerged in its business plan.
WeWork eventually went public via a special purpose acquisition company (SPAC) merger although questions remained about the long-leases underpinning its model, and the changing fate of the office sector post-Covid.