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Comment by howlingfantods | Hacker News Reader

Guys, it’s chapter 11 bankruptcy. Wework is not going out of business. One of the top uses of chapter 11 is to renegotiate/break commercial leases. Wework is going to continue as a company though it may shut down some locations. It is absolutely going to use chapter 11 to pressure landlords to renegotiate leases.

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During the second quarter, WeWork lost $397 million. It said it had $680 million of liquidity, $205 million of which was cash.

The company had net long-term debt of $2.9 billion as of June end and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial real estate sector.

I don’t know even if they want to continue operating the math isn’t mathing. And commercial landlords are also hurting badly so not sure they are in a position to make some sweetheart deal with WeWork.

WeWork doesn’t own any buildings, has the code base website and brand for its booking site, list of members, and some staff. Cheap 11 will likely remove executives, so all that’s left is the leases as far as a ‘business’. Which are worthless because new ones negotiated now would be way more favorable.

So it’s stripped to a brand and website and soled to Regus I bet.

The statistic for companies that successfully emerge from Chapter 11 is pretty low. It's less than 10%.[1]

[1] https://seekingalpha.com/article/4472388-what-is-chapter-11-...

I don't believe Chapter 11 has a very high survival rate, and whatever would emerge would not resemble WeWork except in name. They're essentially out of business in my mind (but have been for some time now).

Does WeWork still rent office space from Neumann?

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