WeWork Adopts Tax Asset Preservation Plan

WeWork Adopts Tax Asset Preservation Plan

WeWork Inc. said Friday that its board of directors has adopted a plan that preserves the availability of the company’s net operating loss carryforwards and other tax attributes under the Internal Revenue Code and prevents a change of ownership.

The office-sharing company said the plan would protect long-term stockholder value.

The board’s move is related to transactions announced by WeWork on March 17 to deleverage its capital structure and bolster liquidity by restructuring its outstanding debt and raising additional capital, the company said.

As of Dec. 31, WeWork had $6.9 billion of U.S. federal and $6.6 billion of state net operating losses that could be available to offset its future taxable income.

Friday’s plan is intended to reduce the likelihood of an ownership change at WeWork by deterring any person or group from acquiring 4.9% or more of WeWork’s outstanding class A common stock.

Under the plan, any person who currently owns 4.9% or more of WeWork’s class A stock may continue to own its shares but may not acquire any additional shares of class A common stock without triggering the tax-asset-preservation plan.

The plan took effect Friday and is scheduled to continue until April 6, 2024.

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