WeWork prevailed in its effort to keep its customer list out of the public eye and away from opportunistic rivals.
Lawyers for the bankrupt co-working company and the Department of Justice agreed to a deal that would shield the names and addresses of the company’s 600,000 customers, Crain’s reported. The judge approved the deal late Wednesday.
There will be at least one person who will be able to cast their eyes on the list: WeWork is required to provide an unredacted copy of the customer list to the Justice Department trustee monitoring the case.
Lawyers for WeWork contended the information could be weaponized by rival companies to poach tenants with “unimaginable precision” and the damage wrought from a tenant roster disclosure could mean WeWork wouldn’t survive its ongoing bankruptcy case.
The trustee for the DOJ previously argued there was no compelling reason to conceal the tenant roster, noting the importance of public disclosures ingrained in bankruptcy law.
With the client list safely ensconced from the public, WeWork’s legal counsel can turn its attention to the other difficulties cropping up during bankruptcy. The company’s Chapter 11 filing grants it leverage to escape leases without paying costly termination fees and pare down debts.
Landlords haven’t been thrilled with the process. Last week, attorneys representing Boston Properties, Brookfield Properties and Starwood Capital objected to the co-working company’s debtor-in-possession financing, which would spring from SoftBank’s coffers.
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Landlords have also objected to WeWork’s restructuring plan, which has seen the company shed more than a fifth of its 300 leases. The company has 210 days from filing to cancel and amend leases, so more changes are almost certainly coming.
But WeWork needs to strike a tricky balance of reducing rent obligations while maintaining a good relationship with landlords will be essential to the company should it emerge from bankruptcy.
— Holden Walter-Warner