WeWork spurns Adam Neumann, finalises new overhaul deal
WeWork Inc and its major financial backers including SoftBank Group Corp. 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.
WeWork has struck an agreement with senior lenders, who have agreed to provide the business with roughly $450 million in Chapter 11 and exit financing in exchange for equity in the reorganized business. SoftBank and other owners of the company's existing letters of credit could also swap their debt holdings for stock after exiting Chapter 11, WeWork lawyer Steven N. Serajeddini said during a Monday bankruptcy court hearing in New Jersey.
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.
The proposal, which lawyers are still documenting, has support from owners of most of WeWork's $4 billion in senior
