The company WeWork, which spent years trying to offer flexible workers the opportunity to work in spruced up unused office space, at their expense, has now filed for bankruptcy.
The company was founded by Adam Neumann, with investors including BlackRock, Goldman Sachs and SoftBank.
David Tolley, the company's chief executive, reported that around 90% of the company's lenders would now convert around $3 billion in debt to equity in the company.
The company, based in New York, was valued at $47 billion at one point, but recently listed its combination of assets and liabilities at somewhere in the large range of $10 billion to $50 billion in a federal court filing in New Jersey.
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Tolley said in a news release, "Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet."
The company said that WeWork Inc. and "certain of its entities" have filed for Chapter 11 bankruptcy protection in the U.S., and plans to file for recognition proceedings in Canada under that country's Part IV of the Companies’ Creditors Arrangement Act.
The company once gained major notoriety with the promise to change how office work operates. During an attempt to make an initial public offering in 2019, the company revealed large losses.
And after going public, the company still found itself struggling to improve.
Still, Tolley tried to sound optimistic in the press release, writing, "these steps will enable us to remain the global leader in flexible work. I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure."
In a recent earnings disclosure, the company said it had "substantial doubts" about the possibility that it could survive financially.
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