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WeWork’s official junior creditors committee is seeking court approval to sue SoftBank, the co-working space provider’s biggest equity holder, alleging the Japanese conglomerate used WeWork’s prebankruptcy debt restructuring deal to improve its position in the company’s capital structure, WSJ Pro Bankruptcy reported. The committee said in a bankruptcy court filing Wednesday that SoftBank and another group of creditors representing 62% of WeWork’s unsecured notes orchestrated the May 2023 debt restructuring to “mitigate their losses and elevate their position in” WeWork’s capital structure, knowing that the company’s bankruptcy filing was imminent. Because of these “uptier transactions,” WeWork’s general unsecured creditors—including landlords and holders of about $180 million in unsecured notes—were left subordinated to $2.4 billion in newly created secured debt, the committee said. A WeWork spokesman didn’t directly comment on the committee’s assertion but said the company has made transparency and full cooperation with its key stakeholders a priority since its bankruptcy filing in November. The company remains focused on its lease renegotiations with landlords, aiming to emerge from bankruptcy “financially strong and profitable,” he said. The committee wants the bankruptcy court’s approval to pursue its claims against SoftBank and the participating creditors and, if appropriate, wants to seek a settlement to recover money for its constituents, according to the filing.

As the North Carolina Theatre in Raleigh works to emerge from bankruptcy reorganization, it’s pushing to terminate key contracts, from leases to employment, the Triangle Business Journal reported. The action includes an employment agreement with Eric Woodall, who was named executive artistic director of the theater last September. In a court motion to terminate Woodall’s contract, NCT says that doing so is “a proper use of its business judgment.” The theater is asking a judge to rule that any claims arising from the contract termination be filed in the next 30 days. Last year, Woodall had actively pushed for additional funding for the theater, which is housed downtown at the Martin Marietta Center for the Performing Arts. “We are determined to stay afloat and thriving," he told WRAL in November. But a post-pandemic comeback proved to be a difficult task. Last month, Woodall posted on LinkedIn that he was looking for a new role. The theater's board voted to pursue bankruptcy on Feb. 12. The bankruptcy filing shows just under $205,000 worth of assets and more than $2.1 million in debts.

Landlords that aren’t engaging in lease negotiations with WeWork can tap letters of credit to cover rent the bankrupt co-working space provider is withholding, the company said in a filing, WSJ Pro Bankruptcy reported. The brief was submitted on Wednesday to the U.S. Bankruptcy Court in Newark, N.J., in response to petitions from roughly 20 landlords who requested the court’s intervention to collect January and February rent payments. The New York-based company said in the filing that the “vast majority” of those landlords have access to letters of credit, a financial instrument that serves as an alternative to a traditional cash security deposit. Those landlords should go ahead and draw funds from the banks that issued the letters of credit on behalf of WeWork to cover the overdue rents, the company said in the filing. Lawyers for the landlords have argued in their filings that bankruptcy code requires WeWork to make rent payments without delay because they are considered administrative costs that are first in line to be paid as they come due. A number of previous bankruptcy cases indicated that security deposits shouldn’t be depleted to satisfy administrative costs, the lawyers said. WeWork has been in violation of bankruptcy rules by not making rent payments, they said.

Co-working giant WeWork Inc. is seeking fresh financing in order to finish negotiating rent cuts with landlords and exit bankruptcy, it revealed in a court filing, Bloomberg News reported. The beleaguered company needs the funds mainly to pay rent on office spaces used by its customers, while it deliberates which buildings around the world to keep and which to shed as part of its chapter 11 reorganization. WeWork said that its efforts “are at a critical juncture,” in a court filing that responds to complaints by a number of landlords. More than a dozen landlords had asked a federal judge to force WeWork to pay rent they claim it’s withholding in violation of bankruptcy rules. WeWork has denied the allegation, arguing that the landlords could be paid using other means, such as letters of credit, rather than demanding funds from its shrinking pool of money. The “vast majority” of the unpaid landlords have access to letters of credit and surety bonds set up to ensure they are paid, WeWork pointed out in its filing. The landlords could also be paid using traditional security deposits that renters typically put down when signing a lease, the company argued.

Bankrupt coworking-space provider WeWork said it owes 160 landlords no rents for the month of November, according to a court filing, WSJ Pro Bankruptcy reported. The company said in a Wednesday bankruptcy court filing that those landlords who disagree with the listed amount of the so-called stub rent “must first engage in a good-faith attempt to resolve such disagreement with [WeWork] before filing their proof of claim.” WeWork filed for bankruptcy on Nov. 6 after struggling with a downturn in the office market. Unless the company rejected the leases as of that date, it owes its landlords the stub rent from the petition date to the end of November, according to bankruptcy code and case law in the Third Circuit Court of Appeals. That circuit covers the U.S. Bankruptcy Court of New Jersey that handles WeWork’s bankruptcy case. The filing came as a surprise for those landlords listed in the document along with the amount zero.