WeWork's Latest Move To Avert Bankruptcy

WeWork is in the process of assembling a team of advisers to assist with a restructuring effort, as it grapples with a substantial debt burden and underwhelming financial performance, according to individuals familiar with the situation.

The prominent co-working company has enlisted the services of real estate adviser Hilco Global, re-engaged consultant Alvarez & Marsal, and once again sought guidance from the law firm Kirkland & Ellis. WeWork's objective is to avoid filing for Chapter 11 bankruptcy and instead restructure its debts outside of court, one of the sources added.

A representative for WeWork released a statement, saying, "We will continue to invest in our product offerings while simultaneously taking necessary steps to reduce rent and tenancy costs. Our members remain our priority, and, regardless of any near-term actions we may take, we will continue to operate and serve them for the long term."

Earlier this month, WeWork informed investors that there is "substantial doubt" about its ability to remain operational. The company outlined plans to focus on cost reduction, negotiate more favorable lease terms, increase revenue, and secure additional funding over the next year.

WeWork went public in 2021 through a merger with a special-purpose acquisition company (SPAC). In the past year, its shares have plummeted by 97%, and its debt has become deeply distressed, just months after reaching a significant debt reduction agreement with some of its creditors.

Recently, WeWork bolstered its board by adding four restructuring specialists: Paul Aronzon, Paul Keglevic, Elizabeth LaPuma, and Henry Miller