A judge has given the green light to WeWork’s bankruptcy plan, clearing the way for the beleaguered coworking company’s reorganization.
The firm, which filed for Chapter 11 reorganization in November, won court approval to shed billions in debt and drop unprofitable leases from its office portfolio, Bloomberg reported. US Bankruptcy Judge John K. Sherwood ‘s ruling will allow WeWork to exit bankruptcy under the ownership of its senior lenders.
Yardi Systems, a property management software firm based in Santa Barbara, will now run WeWork.
WeWork will shed $4 billion in debt and get $450 million in new financing to get out of bankruptcy, after a last-minute bid by co-founder and former CEO Adam Neumann to buy back the company was unsuccessful.
Of the new money, $337 million will come from Yardi and $112 million from bondholders.
The company never turned a profit. After the firm declared bankruptcy, it was able to exit or renegotiate many of those deals. The restructuring will reduce the company’s rent expenses by about $12 billion, or more than 50 percent, according to a statement from WeWork.
The company said it expects to exit bankruptcy in mid-June.
Read more
Commercial
National
Adam Neumann drops bid to buy back WeWork
Commercial
National
WeWork announces deal to exit bankruptcy, avoid takeover by Adam Neumann
Commercial
New York
The WeWork deal: What was Yardi thinking?