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WeWork, the struggling office space company, said on Friday that it had reached a deal with SoftBank and other investors to significantly reduce its debt and secure new financing, the New York Times reported. The agreement would cancel or convert into equity about $1.5 billion of the company’s debt, reducing WeWork’s total debt to less than $2.4 billion, the company said. In addition, the company will have until 2027 to repay $1.9 billion of its remaining debt, or two years later than those debts are currently set to mature. The deal culminates a tumultuous ride for WeWork, once regarded by venture capitalists as one of the most valuable and promising start-ups. The company, founded by Adam Neumann and backed by SoftBank, sought to shake up the humdrum world of commercial real estate by leasing trendy office space on a short-term basis to large corporations, small businesses and individuals. But that business model never quite lived up to the grand visions of Mr. Neumann and Masayoshi Son, the founder and top executive at SoftBank. In September 2019, the company scrapped an initial public offering, Mr. Neumann stepped down as chief executive, and SoftBank spent billions to keep the firm going. The pandemic leveled another big blow, greatly reducing the demand for office space. WeWork has spent the past few years cutting costs by renegotiating and terminating leases with commercial landlords, making progress toward becoming a sustainable business. But the company remains unprofitable and carries a large debt. The deal announced on Friday will greatly reduce that debt, increase the cash on WeWork’s balance sheet by $290 million and give the company access to $475 million in new financing commitments.

A New Jersey town sued the American Dream mall and entertainment complex over its refusal to make about $7.5 million in property tax-like payments and $400,000 for sewer service, Bloomberg News reported. American Dream’s owner Triple Five Group agreed to make the payments in lieu of real estate taxes to the borough of East Rutherford on land surrounding the mall in exchange for rights to build a hotel, minor league baseball stadium and offices. The payments to East Rutherford, home to the $5 billion project, were supposed to commence once the mall opened to the public, according to a March 3 complaint filed by the town in Superior Court of New Jersey. The borough said in the lawsuit that American Dream has “dubiously asserted” that the complex — which has hosted millions of guests and touted visits by reality television stars like Kim Kardashian — isn’t open for business to the general public. “The truth is simple: Defendants would prefer not to pay the borough because American Dream opened shortly before the COVID-19 pandemic, closed for a matter of months, and — according to widely circulated reports in the press — has struggled financially,” the town said in the complaint. American Dream intends to vigorously defend its position, said Jessica Griffin, a spokeswoman. American Dream, located across the Hudson River from New York City, opened the doors of its entertainment complex in October 2019, almost two decades after a mall on the site was first proposed. Five months later, the pandemic spurred lock-downs to contain the public-health emergency and postponed the opening of the mall’s retail stores until October 2020.

Some hotel owners that rode out the coronavirus pandemic are finding the recent travel rebound might not be enough to persuade lenders to extend new credit when their debts mature in the coming months or years, WSJ Pro Bankruptcy reported. Leisure travel has rebounded since the second half of last year, but the recovery has been much weaker for facilities with large meeting rooms that rely on business trips and conferences, partly because many meetings are now held remotely. Even as business-focused hotels can attract some vacationers, the numbers aren’t high enough to make up for the slow recovery in business travelers. Persistently low occupancy rates for business-focused hotels have driven down their property values. As a result, lenders are asking hotel owners to put up more capital before agreeing to refinance their loans — but cash-strapped borrowers saddled with lots of debt might not be able to meet the requirements. As many as 10 hotel owners in the U.S. filed for bankruptcy this January, compared with just two in January 2022, according to New Generation Research Inc., a data provider on corporate bankruptcies. Recent bankruptcies included two large hotels in Manhattan, a Holiday Inn in the Financial District and a Crowne Plaza in Times Square. Still, a bigger surge in hotel bankruptcy filings is unlikely because of factors including high costs associated with the process, said David Neff, a lawyer specializing in hotel bankruptcy at Perkins Coie LLP. “If things go south, many of them will just hand the keys back [to the lenders],” Mr. Neff said.

Columbia Property Trust, a large office landlord controlled by PIMCO, has defaulted on $1.7 billion in loans tied to seven buildings across the country, marking one of largest office defaults since the start of the pandemic, The Real Deal reported. The firm is now working with its lenders — a group that includes Goldman Sachs, Citigroup and Deutsche Bank — to restructure its portfolio, according to Bloomberg. The loans were all floating rate, meaning Columbia Property Trust started to feel pain after interest rates soared last year. The loans are tied to three office buildings in New York, two in San Francisco, one in Boston and one in Jersey City — a portfolio that was most recently appraised at $2.27 billion in 2021. The New York properties are 245 West 17th Street, 315 Park Avenue South and the office portion of 229 West 43rd Street.

Based on the “natural breadth of the passive voice” used in Section 523(a)(2)(A), the Supreme Court held yesterday in a unanimous opinion by Justice Amy Coney Barrett that a partner who herself was innocent of fraud is nonetheless saddled with a nondischargeable debt resulting from the fraud of her partner. The opinion is a reaffirmation of the Court’s holding in Strang v. Bradner, 114 U.S. 555 (1885). In a concurring opinion, Justices Sonia Sotomayor and Ketanji Brown Jackson endeavored to limit the scope of the holding by saying that they understood the outcome to be based on the existence of a partnership under state law. Read the full column.

Troubled discount home-goods retailer Tuesday Morning Corp. will close more than half its locations nationwide after filing for chapter 11 protection for the second time in three years, MarketWatch.com reported. The company filed for bankruptcy on Feb. 14, with Chief Executive Andrew Berger citing “exceedingly burdensome debt.” The company said it has secured a $51.5 million debtor-in-possession commitment from Invictus Global Management. “We have determined that the best path to reorganizing and transforming the company begins with a chapter 11 filing,” Berger said in a statement. “Fortunately, we have the support of a committed capital provider in Invictus and a clear vision for transforming into a focused retailer that serves its core heritage markets in a profitable manner.” Tuesday Morning said that it currently operates 487 stores in 40 states, and it employed about 1,600 full-time and 4,700 part-time workers, according to its most recent 10-K filing. The company said that the 263 stores targeted for closure are largely in “low-traffic regions.”