After months of impasse, office space retailer WeWork has finally come to a resolution with a group of 18 landlords who have insisted that the company pay the rents to its abandoned leases in full.
As part of the agreement overseen by U.S. Bankruptcy Judge John Sherwood, WeWork’s majority shareholder SoftBank, the Japanese investment company, will redirect up to $682.5 million into new credit facilities to act as a backstop for WeWork’s rent obligations. According to Sherwood’s order, landlords cannot draw from those letters of credit en masse at the end of the month, an option they likely would have taken if WeWork defaulted.
WeWork’s landlords had previously objected to this plan, worrying that debtor-in-possession financing would leave them empty-handed should WeWork’s Chapter 11 restructuring go awry. Attorneys representing the landlord insisted that SoftBank should advance new money as part of the agreement. But earlier in the week, Douglas Rosner, an attorney representing the 18 of those landlords, told Reuters that WeWork and Softbank revised the package to address their concerns.
The group, which includes Beacon Capital Partners LLC, Boston Properties, Nuveen, and other backers, continued to express concerns about how they might stay in control in a volatile situation.