Bankrupt WeWork owes ex-Detroit landlord $5.1 million, filing shows
Posted By: The Detroit News on November 7, 2023. For more information, please click here to read the source article.
Nearly a year after closing its space in Midtown, WeWork has filed for Chapter 11 bankruptcy, with documents showing that owes its former landlord the Platform $5.1 million in lease termination fees.
The Detroit-based developer is among the list of unsecured creditors in WeWork’s Chapter 11 reorganization filing in U.S. Bankruptcy Court in New Jersey.
WeWork previously leased space from the Platform at 6001 Cass Ave. in Midtown. It closed that space in November 2022.
The coworking company has two remaining WeWork locations in Bedrock buildings downtown, 1001 Woodward and 19 Clifford St. Bedrock did not immediately respond to a request for comment.
“Detroit remains a key market for WeWork and we are fully committed to providing our members here with world-class, flexible workspace solutions for the long term,” WeWork said in a statement Tuesday. “Our commitment to the city is unwavering as we continue to work collaboratively with our landlord partners, aiming to craft solutions that set all parties up for sustainable success.”
Officials with the Platform declined to comment on the filing.
In a press release Tuesday, WeWork said it has entered into a restructuring agreement “with strong support from key financial stakeholders to drastically reduce its existing funded debt.”
Douglas C. Bernstein, a Bloomfield Hills-based bankruptcy attorney, said the bankruptcy allows WeWork to shed bad leases and restructure its debt. It remains to be seen how much The Platform will recover in the plan, he said.
“Whether or not the landlords will get anything out of it — too early to tell,” he said.
When the plan is filed, one will be able to determine just how much The Platform would be entitled to recover, Bernstein said.
“Unsecured creditors rarely get full repayment,” he said. “That happens, but rarely. So normally it’s pennies on the dollar and sometimes it’s paid over a period of time.”
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