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

Davis Polk advised an ad hoc group of secured noteholders in connection with the chapter 11 restructuring of WeWork, Inc. and certain of its subsidiaries. The ad hoc group helped negotiate the terms of the restructuring, which reduced the company’s leverage by over $4 billion. WeWork filed its voluntary chapter 11 petitions in the United States Bankruptcy Court for the District of New Jersey on November 6, 2023.

In connection with the restructuring, the ad hoc group, SoftBank Vision Fund II-2 L.P., and Cupar Grimmond, LLC funded the chapter 11 case through the consensual use of WeWork’s cash collateral, a DIP Term Loan C facility provided by SoftBank, and two new-money DIP financing facilities backstopped by the ad hoc group and Cupar. The interim new-money DIP facility of $50 million was funded during the case and repaid upon WeWork’s emergence, and the exit new-money DIP facility of approximately $400 million was funded and equitized upon emergence.

WeWork’s confirmed chapter 11 plan provides for, among other things (i) the equitization of certain claims on account of the new-money DIP financing commitments, certain claims on account of WeWork’s DIP letters of credit and prepetition letters of credit, and WeWork’s first-lien and second-lien secured notes into the common equity of reorganized WeWork, (ii) the cancellation of all other indebtedness and preexisting equity interests in WeWork and (iii) the commitment by SoftBank to provide credit support for reorganized WeWork in the form of an exit letter of credit facility.

Of those who voted on the plan, 100% of WeWork’s prepetition lenders and secured noteholders voted in favor of the plan. WeWork’s chapter 11 plan was confirmed by the bankruptcy court for the District of New Jersey following a hearing held on May 30, 2024, and WeWork emerged from chapter 11 on June 11, 2024.

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 600 locations in 37 countries around the world.

The Davis Polk restructuring team included partner Eli J. Vonnegut, counsel Jonah A. Peppiatt and associates Sophy Ma and Ben Weissler. The finance team included partner David Hahn, counsel Andrei Takhteyev and associate Theodore N. Batis. The tax team included partner Lucy W. Farr, counsel Leslie J. Altus and associate Bradford Sherman. Partner Evan Rosen and associate Heather Weigel advised on corporate matters. All members of the Davis Polk team are based in the New York office.