We are advising an ad hoc group of secured noteholders in connection with WeWork’s restructuring

Davis Polk is advising an ad hoc group of secured noteholders in connection with the chapter 11 restructurings of WeWork, Inc. and certain of its subsidiaries. On November 6, 2023, WeWork filed its voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of New Jersey after executing a restructuring support agreement with creditors, including (i) the ad hoc group, holding approximately 89.4% of the aggregate principal amount of the Series I first-lien notes and 85.2% of the aggregate principal amount of the second-lien notes, (ii) SoftBank Vision Fund II-2 L.P. and certain affiliated entities, as WeWork’s majority equity owner and holder of the Series II first-lien notes, second-lien exchangeable notes and third-lien exchangeable notes, and (iii) a third party investor that holds WeWork’s equity and Series III first-lien notes.

The restructuring support agreement provides for a deleveraging of WeWork’s balance sheet through (i) the commitment by SoftBank to provide credit support for a DIP letter of credit facility for the renewal and replacement of certain of WeWork’s existing undrawn prepetition letters of credit, and the subsequent conversion of remaining undrawn letters of credit under the DIP LC facility into an exit letter of credit facility upon emergence from chapter 11, (ii) the conversion of up to $100 million of drawn DIP LC claims into $100 million of takeback debt, (iii) the equitization of the remaining drawn DIP LC claims, prepetition LC claims, and WeWork’s first-lien and second-lien notes into substantially all of the common equity of reorganized WeWork, and (iv) the cancellation of all other indebtedness and preexisting equity interests in WeWork.

At the hearing held on November 8, 2023, WeWork obtained all of the “first day” relief it sought, including interim approval of the debtors’ use of cash collateral.

WeWork is a leading global flexible space provider committed to delivering technology-driven turnkey solutions, flexible spaces and community experiences. WeWork serves a membership base of businesses large and small through its network of more than 750 locations in 37 countries around the world.

The Davis Polk restructuring team includes partners Eli J. Vonnegut and Natasha Tsiouris, counsel Jonah A. Peppiatt and associates Sophy Ma and Ben Weissler. The finance team includes partner David Hahn and counsel Andrei Takhteyev. The tax team includes partner Lucy W. Farr and counsel Leslie J. Altus. The litigation team includes partner Elliot Moskowitz. Partner Evan Rosen and associate Heather Weigel are advising on corporate matters. Partners Pedro J. Bermeo and Stephen A. Byeff are advising on securities law. Partner Dominic Foulkes is providing U.K. tax advice. Members of the Davis Polk team are based in the New York and London offices.