WeWork Creditors Demand Company Negotiate with Potential Buyers

(Bloomberg) -- Coworking giant WeWork Inc. should be forced to negotiate with potential buyers, possibly including co-founder Adam Neumann, as well as given a 30-day deadline to come up with a plan to exit bankruptcy, a panel of lower-ranking creditors said in a court filing.

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Squabbling among company managers, senior lenders and longtime backer SoftBank Group Corp. has stalled the revitalization of WeWork and its various units, lawyers for an official committee of unsecured creditors told the judge overseeing the company’s Chapter 11 bankruptcy.

WeWork’s reorganization has “stagnated while their liquidity continues to shrink,” because the company has missed nearly all the deadlines laid out in a tentative restructuring deal with lenders and SoftBank, they said in the filing.

“Worse and at the same time, the debtors continue to ignore potential alternative solutions,” including offers that could help repay creditors and preserve the business, the committee wrote.

“We remain intensely focused on finishing this important work and are on track to emerge from Chapter 11 next month as a financially strong and sustainable company,” the company said in an emailed statement. Managers will review any proposals “in the ordinary course.”

In a filing last month, WeWork argued that it is making progress and asked the judge to extend its exclusive right to file a revised bankruptcy-exit plan to July 3. The committee’s request would enable a competing reorganization proposal sooner than that.

Neumann has said he wants to buy back his company, offering more than $500 million. That proposal is at odds with a deal the company cut last year at the start of its restructuring case with SoftBank and senior creditors. Under that proposal, WeWork would slash more than $3 billion of debt, wipe out most of its shares and hand ownership to lenders, according to court records.

The company needs to raise money to exit bankruptcy, but has been unable to do so because its tentative agreement with lenders and SoftBank “remains a dead letter,” the unsecured committee claimed in its filing.

The case is WeWork Inc., 23-19865, U.S. Bankruptcy Court for the District of New Jersey (Newark).

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