announced on Monday a settlement with its junior creditors and a new cash infusion from its senior lenders, moving ahead with a bankruptcy deal that rejects a $650 millionDuring a hearing in Newark, New Jersey, U.S. Bankruptcy Judge John Sherwood signed off on the New York-based, SoftBank-backed company sending its restructuring plan to a creditor vote, putting it on track to exit bankruptcy by the end of May.
After the restructuring, Cupar Grimmond would own a majority of WeWork’s equity, and SoftBank would have 16.5 per cent, although SoftBank’s share could rise to as high as 36 per cent, depending on how WeWork decides to equitize some separate credit facilities it has funded.
Neumann and his new company, Flow Global, have argued that WeWork is selling its equity to “hand-picked” insiders instead of trying to get the highest bid. The judge disagreed, saying that WeWork’s secured lenders had the right to reject Neumann’s offer if it was not high enough to buy out the debt they are owed. Sherwood said he would not “second-guess” the decision by those lenders to take WeWork equity in exchange for cancelling the debt they are owed.