Summary:
- Hospitality company Sonder filed for Chapter 7 liquidation in Delaware on Nov. 14.
- Marriott terminated the agreement with Sonder on Nov. 9 due to default.
- Guests worldwide were asked to leave mid-stay.
HOSPITALITY COMPANY SONDER filed for Chapter 7 liquidation in Delaware on Nov. 14 after its partnership with Marriott International collapsed on Nov. 9. The company operated thousands of rooms in over 40 cities, all of which will close as it pursues insolvency proceedings globally.
Sonder guests worldwide were told to leave their accommodations mid-stay, BBC reported. One customer on Reddit said he could not reenter his room, while others shared photos of themselves carrying luggage through the streets, seeking new rooms.
In its filing, the company listed estimated assets and liabilities as each between $1 billion and $10 billion, according to Business Insider.
“We are devastated to reach a point where a liquidation is the only viable path forward,” said Janice Sears, Sonder’s interim CEO. “Our integration with Marriott International was delayed due to challenges in aligning our technology frameworks, resulting in significant integration costs and a sharp decline in revenue from Sonder’s participation in Marriott’s Bonvoy reservation system. These issues persisted and contributed to a substantial loss in working capital. We explored all viable alternatives to avoid this outcome, but we are left with no choice other than to proceed with an immediate wind-down of our operations and liquidation of our assets.”
Friday’s bankruptcy petition said the company has 5,001 to 10,000 creditors, Business Insider reported. However, it did not list amounts owed but included a list of individuals and companies from Italy to Canada, including security services and software firms.
Sonder, once valued at more than $1 billion, said it faced financial constraints due to ongoing problems integrating its systems and booking arrangements with Marriott. The company explored financing and strategic options, including a sale, but could not secure a viable transaction or additional liquidity.
The filing said the process began in September when Sonder formed a board committee to explore options. By October, the company and its advisors were working on a deal to sell assets and secure financing that would have allowed it to continue operating while restructuring debt. On Nov. 2, negotiations collapsed when the prospective lender and buyer withdrew. On Nov. 6, Sonder secured incremental financing from Marriott to fund short-term obligations.
Founded in 2014, Sonder managed properties and offered an online platform for travelers to book stays. Marriott signed a long-term licensing agreement with Sonder in August 2024, prompting the rebrand to Sonder by Marriott Bonvoy. The deal allowed Marriott Bonvoy members to book Sonder stays through its platforms. On Nov. 9, Marriott terminated the agreement due to Sonder's default.
Sonder’s bankruptcy also affected Marriott, which had added Sonder rooms to its website and app to expand its network, according to Bloomberg. Marriott provided funding for “critical short-term obligations” the day before terminating the licensing agreement, according to the court filing.
