Some owners of WeWork Inc.’s more than 700 properties are objecting to the company’s plans to shut down many of its locations in bankruptcy, Bloomberg News reported. Objections filed yesterday pushed back on the company’s timeline for rejecting leases, and rules they say wrongly favor WeWork. For example, one landlord claims WeWork would retain the right to stay in a location, even after canceling a lease. The filings provide a fresh look at the delicate balance WeWork must strike as it seeks to renegotiate or shed onerous leases, a key part of its bankruptcy plan. It’s in talks with landlords for hundreds of properties about rent cuts and other concessions, and must be careful not to push so aggressively that landlords choose to walk away and seek new occupants. “WeWork is walking a fine line because it has to aggressively cut rent costs in order to reorganize successfully, but at the same time its future depends on maintaining healthy relationships with some of those same landlords if it hopes to strike new agreements with them after emerging from bankruptcy, ” said Evan DuFaux, a special situations analyst at the research firm CreditSights. “The case is likely to turn on the landlords’ strategy regarding renegotiation and rejection of leases.” Regulatory filings show that plans during bankruptcy discussions with creditors involved shuttering nearly half of its U.S. and Canadian locations. The company hasn’t shared new figures since filing for chapter 11, but said in a response to questions from Bloomberg that the disclosed numbers were “outdated” and didn’t reflect the “significant progress” made in talks since then.
