King Street Capital and Brigade Capital are holding preliminary talks about the company’s restructuring options and indicated that they would support a plan for WeWork to file for chapter 11 bankruptcy, the people said.
The fund managers have become some of WeWork’s most important investors after they lent $1.2 billion in new debt to the company in March, accounting for about 50% of the company’s long-term debt, according to public filings. WeWork’s interim chief, David Tolley, said in an interview that the company is seeking to avoid filing for chapter 11 by negotiating with landlords and reducing its cost of rent.
Once the most valuable tech startup in the world, with a staggering $47 billion valuation, WeWork currently has $205 million in cash on hand, per securities filings, after spending $530 million in the first six months of 2023.