WeWork Presses Landlords For Ch. 11 Lease Concessions

Allen Matkins lawyer, Ivan Gold, was recently quoted in Law360’s article regarding WeWork’s Chapter 11 case. Flexible office space provider WeWork is aggressively pursuing lease concession negotiations with landlords in its Chapter 11 case, emphasizing the importance of landlord support for its restructuring plans. WeWork's strategy involves withholding rent payments from property owners not engaged in talks, leading to an increase in settlements. Despite success in some cases, several landlords have challenged WeWork's approach, requesting the bankruptcy court to compel rent payment and criticizing the company for using bankruptcy protections while not fulfilling its own rent obligations.

A group of seven property owners with a pending motion to compel said WeWork held back $3 million in January rent, and as much as $33 million in total across the landlord constituency. Ivan Gold, representing the seven property owners, told the court the Bankruptcy Code doesn't permit nonpayment of rent obligations in Chapter 11 after the first 60 days of a case, and that no exceptions provided in the code apply to this debtor to defer rent payments.

"The debtors have decided to self-help their way to rent deferral," Gold said at the hearing. "They have unilaterally declared their own rent deferral program outside the boundaries of the Bankruptcy Code."

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