- On Thursday, a bankruptcy judge approved Knotel's sale to a subsidiary of Newmark.
- Knotel filed for bankruptcy in January after facing pre- and post-pandemic financial difficulties.
- The coworking-spaces operator has laid off staff, but more cuts loom ahead.
On Thursday afternoon, a federal bankruptcy judge approved the sale of flexible-office-space operator Knotel to a subsidiary of commercial real-estate giant Newmark.
Judge Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware approved the sale after no other qualified bidders submitted an offer.
Digiatech, the subsidiary of Newmark, gave the company $20 million in debtor-in-possession financing and made a $70 million stalking-horse bid to acquire the company. Knotel, which operated as many as 200 coworking spaces worldwide at its peak, was last privately valued at $1.3 billion when it raised money in August 2019.
In late January, Knotel filed for bankruptcy after its pre-pandemic financial difficulties were compounded by the hostile environment for commercial real estate because of the mass switch to remote work.
An Insider investigation found that the company lost $400 million in two years.
The January bankruptcy filing came just weeks after CEO Amol Sarva told staff that the company had brought in new funding. As a slew of landlord lawsuits and unpaid bills added up last year, Knotel laid off a large percentage of its employees.
In February, the company filed a notice that it may lay off 106 workers as part of bankruptcy, though it was unclear how many of these employees would be retained by the Newmark subsidiary.
Last Friday, in an email reviewed by Insider, Knotel CEO Amol Sarva told employees Newmark would take over the company.
"We have done many great things together; I hope we do much more together in the future," the CEO wrote.
Sarva cautioned in the email that he hadn't yet received Newmark's verdict on which employees would stay, but said "it will be a significant cut."
"We look forward to completing our purchase of Knotel and welcoming so many of their talented professionals to Newmark," Newmark Chief Executive Officer Barry Gosin said in a statement on Thursday.
Knotel could not be reached for immediate comment.
