June 12, 2024

WeWork was once worth as much as $47 billion.

WeWork was once worth as much as $47 billion.
Photo: Justin Sullivan (Getty Images)

Seven months after WeWork officially filed for Chapter 11, the once high-flying office sharing company is set to officially end bankruptcy proceedings next month.

After a federal judge in New Jersey approved its restructuring plan on Thursday, WeWork will get a new lease on life under the command of Yardi Systems, a California-based provider of software to office and residential landlords. Yardi is taking a majority stake in the firm in exchange for $450 million in funding alongside other investors, including Japanese investment company Softbank.

The approved plan eliminates more than $4 billion in pre-petition debt, effectively allowing WeWork to emerge from from bankruptcy “debt free,” according to a statement. WeWork’s rent obligations were cut in half to $10 billion.

WeWork CEO David Tolley in a statement said that the company completed its bankruptcy proceedings with “success well beyond out initial expectations.” He added that WeWork has seen “strong demand” and increased its “member net promoter scores,” which measure how willing a customer is to recommend a product or service to others.

WeWork’s new global portfolio will include 600 locations across 120 cities in 37 countries, according to the company. It says its portfolio supports 550,000 customers across the world. Going forward, it plans to make a $101 million profit in 2025 after taking a $15 million hit for the rest of this year, Bisnow reports.

The approval of the deal comes just days after former CEO and co-founder Adam Neumann dropped his $650 million bid to take back the company and criticized the restructuring plans. In 2019 Softbank paid Neumann hundreds of millions to give up control and leave WeWork after reports emerged of corporate misgovernance, excessive spending, and a reckless culture.

At its peak in 2019, WeWork was valued at $47 billion. The company’s downfall was accelerated by a failed attempt an an initial public offering and the effects of the pandemic. By November, when it filed for Chapter 11, WeWork was worth just $45 million.

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