WeWork’s unsecured creditors committee blasts lack of case progress

By Sarah Lizee

Olympia, Wash., April 22 – WeWork Inc.’s motion seeking a 120-day extension of its exclusive periods to file and solicit votes on a Chapter 11 plan drew an objection from the official committee of unsecured creditors, according to documents filed Friday with the U.S. Bankruptcy Court for the District of New Jersey.

The company asked the court to extend the exclusive plan filing period through July 3 and the exclusive solicitation period through Sept. 3, as previously reported.

The committee said that while the company is seeking conditional approval of a disclosure statement on an emergency basis in an attempt to demonstrate progress toward confirmation of an amended Chapter 11 plan, the debtors are no closer to finalizing their placeholder plan and obtaining critical post-petition financing than they were when the cases started.

“More than two months after filing the initial plan, the proposed plan remains a dead letter because the debtors, the ad hoc group, SoftBank and Cupar (all parties to the RSA) have been unable to agree on the terms of the post-petition and exit financing that are necessary to get the debtors through the remainder of their cases and successfully transition out of bankruptcy,” the committee said in the objection.

“As a result, the debtors have missed nearly all of the RSA milestones, the cases have stagnated while their liquidity continues to shrink, and the debtors are now seeking conditional approval of the revised disclosure statement on an emergency basis in an effort to show ‘progress’ in connection with the motion, effectively trampling on stakeholders’ due process rights.”

The committee said the company also continues to ignore potential alternative solutions, including those that could provide more meaningful recoveries to the debtors’ constituents and preserve the business as a going concern.

“As widely reported, Flow and certain third-party financial firms have provided a proposal to the debtors and have repeatedly attempted to perform the basic diligence necessary to firm up their bid,” the committee said.

“Inexplicably, the debtors have not provided the Flow parties with diligence access at this point in time nor engaged in a more broad marketing process.”

The committee said the debtors’ lack of progress in these cases, their shrinking liquidity and their unwillingness to conduct a proper marketing process or even engage with interested parties making unsolicited offers to the debtors prove that the exclusivity extension should be limited to up to 30 days.

WeWork is a New York-based provider of shared workspaces and related business services. The company filed bankruptcy on Nov. 6, 2023 under Chapter 11 case number 23-19865.

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