WeWork’s long-awaited exit from bankruptcy proceedings came with a twist, as things usually do with the enigmatic co-working company.
The firm emerged from Chapter 11 bankruptcy protection after seven months, CNBC reported, a day after a bankruptcy judge approved the company’s financial plan.
In making the move, WeWork hired former Cushman & Wakefield executive John Santora as chief executive officer, its fourth in five years. Santora, who had spent 40 years at the commercial brokerage, was most recently its tri-state chair.
“Thanks to the tireless efforts of the entire organization, we are well-positioned to look optimistically to the future and to realize the incredible potential of this wonderful company,” Santora said in a statement. He might have also thanked the bankruptcy process, which allowed WeWork to cancel or renegotiate the expensive, long-term leases that have rendered it unprofitable since its founding.
Santora replaces David Tolley, who became the interim CEO a year ago when Sandeep Mathrani departed. Tolley had the interim tag lifted in October as WeWork geared up for bankruptcy.
Last month, WeWork gained approval for its plan to shed billions in debt and get out of money-losing leases. Property management software firm Yardi Systems became the primary investor in the revamped company and installed CEO Anant Yardi on WeWork’s board of directors.
The approved plan called for WeWork to dump $4 billion in debt and receive $450 million in new financing. The company foiled a last-minute bid by its co-founder and former CEO Adam Neumann to buy it.
Of the new money, $337 million comes from Yardi and $112 million from bondholders.
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Once valued by its private investors at $47 billion, WeWork entered bankruptcy with debts of $18.65 billion and assets of $15.06 billion. In bankruptcy, it renegotiated 190 leases and quit 170, reducing its annual rent and tenancy expenses by more than $800 million.
The company’s portfolio now spans roughly 45 million square feet across 600 locations in 37 countries.