The Swiss bank lost out on an underwriting mandate after Wework blew off its stock-listing. And then UBS' private bankers discovered a dangerous smell in phone booths maintained by the Silicon Valley company.

While We (formerly Wework) licks its wounds following a retreat from plans for an initial public offering, a subsidiary of the technology firm is grappling with an unusual problem: traces of a potential toxic substance were found in UBS' Weehawken offices, according to «Bloomberg».

The office-sharing business co-founded by Adam Neumann diversified into corporate refurbishments – and clinched UBS as a client. The company is redesigning a 30-year-old Hudson River site housing 4,400 UBS employees.

Freshening Up

U.S. head Tom Naratil wanted to freshen up the marble-outfitted site, including its lobby, a common area home to the bank's biggest U.S. learning and development center, and an IT and digital workspace. The goal was to foster a more collaborative work atmosphere.

Before the IPO was blown off and investor Softbank injected money, We commanded a valuation of upwards of $50 billion. Other, equally obvious problems emerged during the UBS refurb: private bankers complained that «phone booths» meant for private calls smelled.

Refurb on Track

UBS consulted a specialist, which identified elevated levels of formaldehyde – a chemical that can irritate the skin, throat, lungs, and eyes, and can lead to cancer, according to the U.S. Center for Disease Control and Prevention. UBS replaced the booths, the news agency reported, citing two sources. A spokesman for UBS didn't comment on the booths.

«The project (refurbishment) is still on on-track and once completed we will have a press preview event,» UBS said.  Wework had contracted a now-defunct company to manufacture the booths installed at UBS, «Bloomberg» reported.

Hype and Excess

More than 2,000 «toxic» phone booths were installed at other We sites in the U.S. and Canada. The company emailed its members about the potentially carcinogenic products after the UBS test revealed the problem, slapping signs reading «CAUTION: DO NOT USE» across the doors. 

The phone booths are the latest in We's boom-to-bust saga which included nearly every symbol of hype and excess – hyperbolic valuation, private jet flights, a founder in sole operational control, nepotism, and recreational drug use.