Co-working space company WeWork may be close to clawing its way out of financial ruin after reaching a deal with backers that would fund its exit from Chapter 11 bankruptcy.
The agreement, valued at $450 million, is being made by lenders who want equity in the restructured business, Bloomberg reported, noting that if the transaction is made, third party investor Cupar Grimmond LLC would be the majority owner.
This also means that, at least for now, WeWork co-founder and former CEO Adam Neumann has been denied his $500 million bid to buy the bankrupt company.
The eccentric entrepreneur could challenge the deal if he can persuade U.S. Bankruptcy Judge John K. Sherwood to scrap the restructuring plan in the coming weeks as WeWork drums up a final contract, Bloomberg said. This could prove difficult, according to Neumann’s attorney Susheel Kirpalani, who said advisors for the co-working space have been unwilling to negotiate with Neumann.
Should the deal receive court approval, it could be a watershed moment for WeWork after it filed for bankruptcy in November 2023 following a string of financial headwinds, including skipping out on $95 million in interest payments the month before.
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