If approved, a restructuring deal will allow the fallen co-working giant exit bankruptcy with less debt and a leaner, less expensive lease portfolio.
Already a subscriber?WeWork and its major financial backers, including SoftBank Group, have struck a new restructuring deal to get the ailing workspace provider out of bankruptcy, spurning a competing financing proposal from co-founder Adam Neumann.
Co-founded by Adam Neumann and Miguel McKelvey in 2010, WeWork had a meteoric rise before a stunning fall.The restructuring deal represents a major milestone for the company after it filed for bankruptcy in November. If approved by the court, the business will be on a path to exit court protection in the coming months with less debt and a leaner, less expensive lease portfolio.
Eli Vonnegut, a lawyer representing a senior lender group backing the deal, said the agreement “is some of the best news we’ve had in this case”, and the company now has a “fast and reliable path out of bankruptcy”. WeWork needs to leave bankruptcy as quickly as possible because the Chapter 11 case has been extremely expensive and administrative costs incurred during the case aren’t sustainable, he said.
WeWork’s advisors have refused to negotiate with him and agreed to the restructuring transaction without public bidding on the firm’s assets, Neumann’s attorney, Susheel Kirpalani, said during the hearing.US bankruptcy judge John K. Sherwood said it was up to the lenders, who are owed billions of dollars, to decide whether or not to negotiate with Mr Neumann.
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