WeWork seeks permission to begin canceling leases in bankruptcy

WeWork will make its first U.S. bankruptcy court appearance on Wednesday, seeking to advance a restructuring proposal that could cut $3 billion in debt and shrink the company’s real estate footprint.
The Softbank-backed office space-sharing company filed for bankruptcy protection in Newark, New Jersey, bankruptcy court on Monday, seeking to address more than $4 billion in debt and unsustainable rent costs. WeWork, once valued at $47 billion, expanded at breakneck speed but racked up steep losses on its long-term lease obligations after a post-COVID plunge in demand for office space.
After an earlier effort to restructure its debts failed to stave off bankruptcy, WeWork reached a restructuring agreement with over 90% of its bondholders to convert $3 billion of debt into equity in the company.
WeWork managed to renegotiate 590 leases before filing for bankruptcy, saving about $12.7 billion in future rent payments.
The company has identified 69 leases it intends to break in the initial days of its bankruptcy, including 41 in New York City, and it could seek to reject additional leases later in its bankruptcy. WeWork said it is seeking to renegotiate terms on other leases with 400 landlords.