WeWork has filed for bankruptcy in the US, a move that follows years of struggle for the co-working company.
The firm reported liabilities of $10bn to $50bn (£40.5bn), according to a bankruptcy filing in the New Jersey federal court.
The filing gives WeWork legal protection from its creditors and more tools for negotiations with landlords.
WeWork, known for renting on flexible terms to start-ups and freelancers, was once seen as the future of the office.
But it relied on rapid growth to mask its steep costs.
"WeWork Inc. and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code, and intend to file recognition proceedings in Canada," the firm said in a statement.
WeWork chief executive David Tolley said he was "deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement".
"We remain committed to investing in our products, services, and world-class team of employees to support our community," he added.
Investors had privately valued the firm at some $47bn at its height in early 2019. However, WeWork shares have lost around 99% of their value this year.
On Monday, trading of WeWork shares were temporarily halted on the New York Stock Exchange, amid reports of a possible bankruptcy filing.
The company's shares last traded at $0.84 apiece.
The New York Stock Exchange (NYSE) requires listed companies to maintain a share price of at least $1. If the price of a stock drops below $1 and remains below that level for 30 days, the company runs the risk of being delisted from NYSE.
Demand for co-sharing office spaces by WeWork was hit after a disastrous 2019 effort to raise money in a public listing hurt its reputation and led to the ousting of its co-founder Adam Neumann.
That was swiftly followed by pandemic which led to many office closures around the world, with people having to work from home.
In the first half of this year, WeWork lost more than $1bn, weighed down by the expense of operating its offices, as well as other costs.
The company has been scrambling to sell off parts of its business and pushing to shut locations or renegotiate the terms of long-term leases and debts.
Last month, as those discussions intensified, WeWork told investors it was not making payments on its loans.
Major shareholder SoftBank, a Japanese technology conglomerate, has pumped tens of billions of dollars into WeWork as it continued to lose money.
As anticipation of a bankruptcy filing emerged, Mr Neumann said the fall of WeWork was "disappointing".
"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before," Mr Neumann said.
"I believe that, with the right strategy and team, a reorganisation will enable WeWork to emerge successfully," he added.
Founded in 2010, WeWork claimed in June this year to have more than 700 locations around the world and about 730,000 members.
© OfficialAffairs
