Kirkland & Ellis among law firms advising on WeWork bankruptcy case

Flexible office space provider filed for bankruptcy protection in the US on Monday

WeWork is saddled with debt tied to its long-term office leases Shutterstock

Kirkland & Ellis and Cole Schotz are advising WeWork on its US bankruptcy protection proceedings as the co-working office space provider seeks to restructure its debt load and negotiate cheaper deals with landlords.

Goodmans has also been appointed to provide Canadian legal counsel as the company announced plans to file recognition proceedings in the country. Munger Tolles & Olson is also providing counsel to a special committee of WeWork’s board, according to Bloomberg.

The Chapter 11 bankruptcy proceedings cap a spectacular fall from grace for the office leasing business. The company had been valued at $47bn less than five years ago as charismatic founder Adam Neumann convinced investors that WeWork was doing something more profound than renting out office space in buildings it didn’t own.

After a botched IPO attempt in 2019, Neumann was ousted as CEO. Not long after, the Covid-19 pandemic hit, significantly reducing demand for office space and hammering WeWork’s business model, causing losses to mount rapidly.

Kirkland most recently advised WeWork in March on a capital restructuring with a group of its debt holders, including Softbank, which helped to reduce WeWork’s net debt by $1.5bn and extend a series of upcoming debt maturities. WeWork had been trying to avoid pulling the trigger on a Chapter 11 bankruptcy filing and was continuing to seek ways to restructure its debts outside of court, Bloomberg reported in August.

However, those efforts proved unsuccessful, and WeWork filed for bankruptcy protection on Monday (6 November).

Other advisors on the Chapter 11 proceedings include PJT Partners, which is serving as the company’s investment banker, and consultancy firm Alvarez & Marsal, which is providing financial and restructuring advice. Hilco Real Estate is assisting the company with lease renegotiations, which will be crucial for WeWork’s survival.

In a statement, WeWork said its locations outside of the US and Canada are not part of the process.

Pam Swidler is WeWork’s current chief legal officer, having been promoted to the role in February this year. She originally joined WeWork in 2016 as a senior counsel from Kramer Levin Naftalis & Frankel and has worked in a number of different legal roles for the company.

Previous CLO Jared DeMatteis left in February to join US fintech DailyPay.

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