American court hearing recordings and interviews - WeWork Inc. bankruptcy hearing November 8, 2023 (Newark, New Jersey US bankruptcy court case 23-19865)

Episode Date: November 27, 2023

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Recording in progress. Welcome to Norke, everybody. I'm Judge Sherwood, and we are on the record in the case of WeWork, Inc. And many other related debtors. The cases were filed Monday night, and today is the first day hearings. Do I? They told me to do this yesterday. So we've set up a website for this case on the New Jersey Bank.

The bankruptcy court website, there's a link for rework, which would be helpful to you all down the road. With regard to appearances, we'll just make those as we go. If you are heard today, introduce yourself. And if you're here but you don't make an appearance, you can make an appearance in writing using a form. that Florey has. And in terms of people on Zoom, we'd ask you to turn off your video until you want to speak and then introduce yourself.

So the debtor has followed an agenda, and we have a lot of work to do, so why don't we start with Debtors' Council and get going. Judge, very briefly, it's a pleasure to be before you. Michael Sorota, Lauren Yusatine, and Daniel Harris, Colt, Doc. I've proposed co-counsel to the debtors.

I know Your Honor is not taking appearances, but I just wanted to introduce Mr. Stephen Saraghedeni, who will be presenting initially from Kirkland. We've filed ProHoc applications for the Kirkland team, which I assume Your Honor will take up in due course, but we ask Your Honor to consider the Kirkland arguments today while those applications are pending. Okay, of course.

How do you say your last name, sir? Sarah Jadini, Your Honor. Sarah Jadini, all right. Good morning. For the record, Stephen Sarah Jadini of Kirkland and Ellis on behalf of the WeWork debtors. With me in court today, Your Honor, are my colleagues, Kira Foster, Oliver Paray, Jimmy Ryan, Josh Greenblatt, and Bill Arnaud. We're happy to be here today for our first day hearing. I want to start by thanking, Your Honor, for hearing us on an emergency basis.

We really appreciate you taking the time and look forward to being in front of Your Honor in these cases. I also want to thank the Office of the United States Trustee. They've been working with us hard the past few days, and I'm happy to say we've resolved nearly everything with except one issue, I believe, that will take up at the appropriate time. Next, Your Honor, I want to thank the company, its leadership, and its employees, its members, as well as our financial stakeholders. A lot of people have been working, a lot of long hours to get us here.

I'm responsible for a lot of the groggy faces you've seen near courtroom today, but we're thrilled to have a pre-negotiated restructuring support agreement in these cases that's going to chart the course and allow us to emerge as a vibrant, healthy company. It's okay with Your Honor. I have a brief presentation that I'd love to walk the court through that orientes us in these cases. Yes, go ahead. Your Honor, we work is a company that needs little introduction. It's meteoric rise and the challenges that came with that.

have been well documented. And, in fact, Your Honor, can cross-check a lot of the comments I make today by referring to any number of the TV series, documentaries, and books that have been written on this subject. But in its inception, the company intended to serve a need, a moment, and in some ways, a generation. The company was the brainchild of its two founders, Adam Newman and Miguel McKelvey. The founders got their start in the industry with a similar business called Green Desk, and they translated those learnings into the model that became a new company.

We work. Now, coming out of the financial crisis, there was a feeling of disillusionment with our old norms of what a successful career was in a movement toward a more collaborative mentality among millennials at the time. And we work really epitomized that ethos. The founders wanted to change the way people worked, bring together entrepreneurs and small businesses, allow them to have a community in an inspiring space where they could benefit from one another professionally and personally. Now, WeWork opened its first location in Soho in Manhattan in 2010 with that vision in mind. Over the next few years, the company raised 568 million in seed capital to begin its expansion.

At the beginning of 2014, Your Honor was valued at $5 billion, and it had 23 locations in Los Angeles, San Francisco, Washington, D.C., and Seattle, as well as internationally in the United Kingdom and Israel. From there, the growth really mushroomed. In 2017, the company raised $4.4 billion from Sopold. That began a relationship, Your Honor, that continues to this day. SoftBank has been a true supporter of this company and backed the company's growth and now is backing its restructuring. By 2018, Your Honor, the company had reached over 400,000 members in 425 locations. The expansion at this point had gone fully global in places like India, Japan, Brazil, Singapore, and the Philippines. Fast forwarding to 2019, the company continued to grow.

and it was really at the start of this year that was the high watermark in a lot of ways for the initial growth phase of the company. It had 700 locations in over 34 country and it was viewed in the same breadth as other technology startups or famous technology

startups at its generation like Uber. Your Honor, yet the company still needed capital to fund its growth at this point. And after some back and forth, in January of this year, SoftBank, or 2019 rather, SoftBank agreed to inject another $2 billion into the company, but that ultimately wasn't enough.

And at this point, the private markets had been exhausted, and the company attempted to access the public markets with the filing of a registration statement in August. Things here started to take a bit of a turn. The registration statement was met with skepticism in the market, and there were questions being raised about the company's go-forward governance, its performance, and its strategy. In light of that, the company withdrew the IPO,

and WeWork's founder, Mr. Newman, resign. At this point, Stock Bank funded an additional, $5 billion of capital, and from there, the company set off on a new strategic plan to transform its business. The centerpiece of that plan was to optimize the company's real estate portfolio, an effort that continues through this day and will continue in these cases, Your Honor. We work at this point was the largest private office tenant in places like New York and London, and it needed to shift its focus from growth, which it had achieved to that point to efficiency. But these efforts, like so many things in our lives, were turned upside down by the pandemic.

But the company persisted and it continued to take a second crack at going public through a D-SPAC transaction. This time, the effort was successful. And that brings us to the WeWork of today. This is a massive global business with operations in all the countries you can see on this map. System-wide, we have over 750 locations and over 650,000 memberships. Your Honor, WeWork is a global leader in workplace solutions. And its product offerings are really focused on a few key categories, The first is and the best known is space as a service.

That's the core business offering. That provides flexibility for members in terms of space and the cost and the time in their in-person workspace. Next, there's WeWork access, and that product digitizes the WeWork space to give members of the ability to work from anywhere. And last is WeWork workplace, which we work working with its technology partner, is an application that allows companies and their employees to manage hybrid work. Now, how this translates to members is really in three formats. We work access gives our customers and members access to locations by the hour and by the day. So that can be done on a subscription basis or pay as you go. Similar to the workplace is on a month-to-month basis or fixed term and gives access again to a turnkey workplace.

And last, our office suite offerings provide space management and planning software. The business really works, Your Honor, for customers of any size. That includes the individuals and small businesses that the founders initially envision. But as the company has matured, it's really grown on the enterprise level as well. Here it provides a global, scalable solution. To give you a sense of the reach, Your Honor, and I was surprised by this fact myself, 58 of the Fortune 100 are members. There are a lot of household names on that list.

WeWork is part of the fabric of the global economy. Employees all over the world, when they think of work, they're actually thinking of a we-work space. And I could look at these pictures that follow all day, Your Honor. The name means something to members. Spaces are special. They inspire. And members and their employees really value that. Now, that we work of today is led by an all-star management team.

I'll start with David Talley, who was appointed this year as the CEO of the company, and has really led the efforts to get us to this point. Mr. Talley is our first-dated friend today, and as I noted, he's in the courtroom with us. I also want to introduce the rest of the team, as you can see you here. Kurt Wainer, our CFO, Pam Swidler, our G.C. Susan Catalano, our chief people officer. Claudia Hidalgo, our chief operating officer. Peter Greenspan, Global Head of Real Estate.

He's been busy. Jennifer Peroda, our chief technology officer. And Ben Samuels, our chief revenue officer. Let's talk about why we are here today, Your Honor. As I mentioned, the companies made progress on its strategic plan. It's faced major headwinds. Months after that high warm mark that I mentioned, we were all hit with COVID. And the pandemic really changed everything about the way we work.

Some of it was temporary and some of it was permanent. And as the world went into lockdown, we suffered an immediate drop in membership spurring these types of headlines you can see on this page. It also has had longer lasting changes as everybody around the world has a newfound appreciation for what can be done remotely. We're live today on Zoom in this courtroom because of it. And as of February of this year, we're still only at 4.000. to 60% of pre-pandemic levels in terms of office attendance.

And that's really had an effect on our membership at the company. It declined for some period, and the company was forced to make along the way major accommodations to retain some of its members. Now, the implications go even further when you combine it with the current interest rate environment. Together, those two things have caused the commercial real estate market to enter a historic trough. That's led to higher vacancy rates and lower rents with greater flexibility. And while that's not a direct competitor to the WeWork offerings, it does put pressure on our business.

And in the face of that, the company has really had to fight hard on its initiatives to maximize profitability and stem the tide. Now, the company has made great progress in its efforts to cut its corporate and operating expenses, and it's successfully divested of some of its non-core assets it acquired in its growth phase. And as you can see here, Your Honor, that translated to real dollars. The company has also been in a multi-year effort on the lease for. front. And that's translated to over 12 billion in future lease expenses that the company has reduced since it started this effort. That's a massive amount of you leveraging. And last, Your Honor, the company has focused on improving the core business, improving its offerings to members,

and has been successful on that front, and it's getting some traction. So the company didn't stop there, Your Honor. Of course, it had to address its balance sheet and liquidity, and that resulted in a major out-of-court exchange transaction earlier this year. That transaction provided for an additional billion dollars in funding, equitized over one and a half billion of its debt, and extended maturities. So there was really a lot of effort to avoiding these Chapter 11 cases and really trying to find a way for this company to go out of it. But in the end, Your Honor, despite the heroic efforts, it just wasn't enough.

Over the summer, the company retained a host of advisors to help it clear its final hurdles. Was that notes exchange transaction? Was that May of this year? That's right, Your Honor. And following the closing of that transaction, the company retained Kirkland and Ellis on the legal side. PJT is investment banker. Alvarez is Marcell as financial advisor. Hilco is real estate advisor and a host of others that you'll see in these cases. The company also appointed, and this was critical, an illustrious group of disinterested directors on our board that are experts in law, finance, accounting, and most importantly, turnarounds.

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Find an agent at cINFIN.com. Those folks are Paul Arensen, Paul Keglevik, Liz Lipuma, and Henry Miller. They're also members, Your Honor, of a special committee here that's delegated with full authority with respect to conflict matters, has been actively evaluating transactions presented to the company, and is leading an investigation in these cases into any potential claims and positive action of the company. Once assembled, this entire team, along with the advisors and the management team, took on the two main issues, the debt load and the lease point. portfolio. Now the company has still, even after the exchange, is over 3.8 billion in funded debt

and over 10 billion, well over 10 billion in future lease obligations. And here, Your Honor, can see on our simplified corporate structure chart. When I say this is a simplified version of it, it really is. I think we might have broken the record for a number of filers. And the majority of our leases here sit in special purpose vehicles. As a reminder, our debtors are for the most part related to our Canadian and U.S. business. In terms of the funded debt, you can see on the next slide an overview of the complex capital structure, the parties, and some of the advisors here. But really started the process by working with a few major constituents, and you can see them on the next slide. The first is SoftBank. Your Honor has heard their name a lot today.

They backed the company repeatedly over the course of history and coming into this cases. They own the majority of our equity in a large part of our secured debt. The next was an ad hoc group of secure note holders. They're represented by Davis Polk and Ducera, and these, note holders also hold a large part of our secure debt. And the last is Cooper Grimmond. They provided us certain first lien notes and they are a major operational partner of the company as well. I'm sorry. Describe Cooper, Cooper again? Sure, yeah. No, they – so there's two components really to – two primary components

and to their relationship. So first and foremost, they issued certain delayed draw first lien notes that we pulled down and access to obtaining liquidity. So they are in effect, given that all these groups have first-thing holdings, on a peri-pissue basis with them on those first-ling holdings. They're also, as I alluded to earlier, part of our technology solutions at the company on the operating side through an affiliate. So, Your Honor, together the advisors went out to these parties, and we really pushed them to come together here on something that would work. There were a lot of complexity, and frankly, a lot of unknowns that I'll get into, that we need to figure out in these cases, that made that a pretty chance.

challenging exercise. But where there was will, there was a way, and the parties here after, as I mentioned, a lot of sleepless nights, took the important first step of signing a restructuring support agreement. And here are the key terms, Your Honor. Really, the agreement is premised on the equitization of the vast majority of our first lien debt. And the other major component is a LC facility, a letter of credit facility that we're going to have access to once it's approved through a new dip financing motion. during these cases so that we're in a position to be able to renew our letters of credit and not causing precipitous draws in the event of their expirations. And so, again, that's going to be important because any of those letters of credit that are drawn will result in additional first-ling claims and significant dilution to our creditors in these cases. So as we're working with landlords and as we're paying rent, we expect to continue to renew those letters of credit with respect to the locations where it makes sense to do so for us. So, Your Honor, we feel good that we're locked in and set up for success, but the complexity

of these cases don't really start there. There's an operational restructuring that needs to take place, and it's been going on for a while with respect to our landlords. So after being retained, Hillco worked with management to really hit the ground running. On September 6, Mr. Talley hosted a conference call with all of our landlords to effectively make a call to action. And over the weeks that followed, we've been in a conference. in robust discussions around the world.

Now, these are hundreds of separate and in some cases very complex negotiations. And in some instances, you're not only negotiating with landlords, but you're also negotiating with their lenders. So they're almost like many restructurings in and of themselves. I'm pleased to report that to this point, we've made some good progress and gotten some very good signals. But with the start of these cases, there's a lot of work to be done. So we're repeating today that call to action.

We really do need our landlord counterparties to engage so that we can emerge a healthy and stable company. And Your Honor will be an active part of this process. Between now and the end of the cases, including as early as today, we're going to be requesting relief from Your Honor to assume amended leases or, as today, begin rejections of certain properties. And we want our landlords to know that there's definitely a first-mover advantage here and for parties to come to the table quickly. So, Your Honor, as I said, we expect to really spend the next several weeks advancing and hopefully making good progress on that front.

With that, we'll have the building blocks to finalize our business plan. And with that business plan in place, we can solicit our plan and be at confirmation by what we hope will be a target of 120 days. Given the work to do on the lease front, our ability to do that will be a function of engagement that we get back from our landlords. And our financial creditors here have made meaningful concessions, and we expect our landlords to do the same in order to maximize value in these cases. So, Your Honor, I want to conclude as I started with an expression of gratitude.

This is an important company. It serves an important role in so many American businesses from the Fortune 500 to the next great startup that's a seed in somebody's mind at our we work right now. We're honored by the support of our employees at the company as well as our members, and we intend to repay that faith in these cases by getting this right and allowing everyone to get back to doing what they love. Thank you, Your Honor. With that, I'll pass the podium over to Ms. Foster. Can I ask a question or two before you leave?

There was a motion filed to reject certain leases, but that's not returnable today. I think you've got, that's teed up for like November 28th. That's right, Your Honor. I misspoke. And can I ask a few questions just about the relationship between these secured lien holders? Let me see if I can get the share. has a quick fault with your and looking to Mr. Talley's declaration

he has where he describes the capital structure. Yep. So you have the senior LC facility and the junior LC facility those are those all held by the SVF

Obligore or SoftBank? Maybe you can... Yeah, we'll try to go back to that slide, Your Honor. So the way to think about it is there are fronting banks on those letters of credit. And to the extent those letters of credit get drawn, those fronting banks will fund to the party with the entitlement beneficiary. When that happens, and as a result of that,

soft bank and as a technical matter, I believe they already are, are subrogated to the claims of those fronting banks. So in effect, it's soft bank, even though... I thought I read somewhere where SoftBank wrote a big... They did, they did, because they had an obligation, and they can address this with your honor as well. They had an obligation leading up to the filing to cash collateralize the full amounts of those letters of credit. So they found that. All right, and what's the difference between the senior and the junior?

They have a relative priority vis-a-vis one another, but from the company's perspective, they're both first-lane claims. All right, and the 1L notes series 1 through 3? Those are Perry-Pesu with those LC obligations. one-l claims. So those top five boxes are all pari-pasu on the same collateral? Exactly. And what it, but the series one, two, and three, are they, are there like inter-creditor agreements between them where? There are arrangements between them, Your Honor, but generally those are all pari-pessu for the purpose of this case. And what about the two-Ls? Two-Ls are second in priority. The two different series are also Perry-Pissue, and then same

with the three-Ls. All right, so the two-Ls are two-Ls. are below or above the three L's and below the one else? You got it. And then the senior notes you see at the bottom there, those are unsecured. And the pre-petition collateral package for all of them is the same? For the most part, now, I don't know if they're any technical distinctions, but generally that's how we've treated them. Those are my questions. Thank you.

Good morning, Your Honor. Kira Foster, Kirkland, and Ellis, proposed counsel to the debtors. Your Honor, I just wanted to reiterate Mr. Sarajeini's thanks to the court as well as to the U.S. trustees' office. As a procedural matter, unless Your Honor has any questions, I'd like to, in the first instance, move our declarations into evidence. Our first declaration is from Mr. David Talley, CEO of the debtors in support of the Chapter 11 petitions and the first eight motions. The declaration was filed at docket number 21. The next declaration is from Justin Schmoltz, managing director at Alvarez and Marcel, which the debtors filed at docket number 54.

And finally, Your Honor, the declaration of Paul Schaefer, partner at PJT Partners, which the debtors filed at docket number 55. Any objection to the entry into evidence of the Schmoltz Declaration, the Schaefer Declaration, or the Talley Declaration? All right, they're admitted in evidence. Thank you, Your Honor. As a procedural matter, I will now take up the joint administration motion. I'm sorry, someone is rising in the back.

Good morning, Your Honor. Robert Lehane, Kelly Dry and Warren. Welcome. Your Honor. I represent a number of landlords, including New Veen, with locations in New York, Boston, and London. And I'm co-counsel for Alan Mackins, my colleagues Ivan Gold and Mike Greger, for a long list of landlord entities. rise to make sure that we're reserving the right to cross-examine the witnesses if necessary. No objection to entry of the affidavits, but my colleagues may want to cross-examine some of the declarants, Your Honor.

Okay. Your right is reserved. Thank you, Your Honor. Prohawk V. Chas are in process and will be filed, and would ask that Mr. Greger and Mr. Gold be allowed to be heard today on these matters. Of course. Thank you very much, Your Honor. Good morning, Your Honor. I've been Gold of Alan Mackins. I will defer to your honor as to when you want me to do it,

but we do have a few really discreet questions for Mr. Talley. I don't want to disrupt the flow of Kirkland's initial presentation, so at whatever point you feel it's appropriate to just get a few things out of the way. I don't believe they're mission critical. Do your questions relate to any of the motions that are on the agenda today? It relates to the interrelation of some facts in the first day declaration, very specifically the ORC chart. The ORC chart.

Yes, sir. But it can, again, there are you way too much stuff on the agenda today. It might be a point where we're off doing something else where we can do that discreetly. I don't want to waste any of the court's time. No, you're not wasting time. I just think that, you know, given the number of things we have on today, if you have any cross-examination that relates to any of the first-day relief being sought, I'll consider that.

But, you know, to the extent you have an issue with the first affidavit that relates to your interests, you can assert those interests another day. We could also, as we go throughout the day, subject to our reservation, I'm sure we're going to have at least one break. I can consult with the Kirkland team, and perhaps we could pin it down another way. Okay. Thank you. Great.

And, Your Honor, we will make anyone available. to discuss with Mr. Gold outside of the courtroom to the extent we take a break. Thank you, Your Honor. So unless Your Honor has any further questions, I'm going to turn to the Joint Administration motion that was filed at docket number 41. Your Honor, prior to filing the motion, we sought comments from the U.S. Trustees' Office, as well as SoftBank and the ad hoc group of note holders as well as Pupar. We've incorporated all comments to the order and motion, and unless Your Honor,

has any questions. We respectfully request admission of the order. Does anyone want to be heard on joint administration? All right. The court has reviewed the motion and believes that the joint administration of these cases for administrative purposes is the right thing to do and we will enter the order. I believe we're looking at we're looking at document 41 and there is a order attached. There should be, Your Honor. All right, no changes to the order? No changes, Your Honor.

All right, we will upload and the docket should read that the motion is granted, and we will upload and sign the order attached to document, docket number 41. Thank you, Your Honor. Next, Your Honor, is the motion to approve use of cash collateral in these Chapter 11 cases filed yesterday at docket number 43. Your Honor, the debtors need access to cash collateral to administer these cases in Chapter 11. We've received informal comments from the U.S. Trustees Office, certain of our landlords, as well as our secured lenders. We've incorporated and continued to incorporate

these comments leading up to this very minute in the hearing. We have a version of the order that incorporates all but one of the comments that we're currently working through. The remaining comment is to footnote number four, and if your honor permits, I'll walk up with a red line of the order just so you can see the latest draft. Thank you. And to the clerk. For me. Sorry, Your Honor.

Two presumptuous. No, that's all right. So, Your Honor, we are fully consensual on the cash collateral order. The only open item is footnote four, and we are continuing to negotiate that issue between our secured lenders and our landlords. I'm very confident that we will be able to resolve that shortly, if not, while I'm speaking at this podium. Footnote four.

Footnote four, it should be on page. Just get you there, Your Honor. Page 39 of the red line, and the page numbers are at the top left-hand corner. Where did you get these comments? Your Honor, these were comments from certain of our landlords, and we've been working on them with our secured lenders. Prior to stepping into today's hearing, there were some additional comments from certain of the landlord's attorneys, which we are working through right now. All right. Do you want to walk me through the changes?

Yes, if that's okay. makes sense. Yes, absolutely. So the main changes from the version that was filed last night as reflected in the red line are as follows. In the first, JPM is our cash management provider. Pursuant to the first day relief, we are providing J.M. with a liquidity minimum covenant that is set forth in the cash management motion, as well as a carve-out. Just to explain how the carve-out operates, the accounts with J.P. Morgan are zero balance. And J.P. Morgan let us know that it's important to them that they don't take any exposure risk during a day. It's at the beginning of the day, checks are paid by the company through these accounts, and at the end of the day,

that money is then repaid by the company to J.P. Morgan. J.P. Morgan's agreed to allow the company to continue operating its cash management system and have an inner-day exposure of $35 million. The reason for the carve-out is to ensure that to the extent anything occurred during a day, JPM actually has no exposure because of the carved-out funds. Let me pause there, Your Honor. Any questions? No, I think I understood that. That was part of the cash management motion, too, right?

Correct, Your Honor. The minimum liquidity covenant is now set forth in the cash management motion, which Mr. Perrae will walk you through. In the cash collateral order, we have the carve-out to cover. protect JPM's position. Okay. Thank you, Your Honor. Your Honor, I just want to flag a few other items for you.

The debtors have approximately $173 million of cash on hand, and our initial budget projects ending cash balance will be $106 million through the week ending in December 1st. As Mr. Serra-Jadini previewed, we will be coming back to Your Honor to seek approval of debt financing during these Chapter 11 cases, as set forth by Mr. Seredini. Mr. Saragini. We're hopeful that we'll be able to file that motion in the coming days, and depending on timing, we'll be able to have it heard on regular notice for the second day hearing. Your Honor, notably...

Do we have a second day hearing yet? Are we going to use that November 28th or 29th date? My understanding is that December 6th was the date that Chambers had suggested, but we are, of course, flexible with whatever makes sense for your honor. Yeah, I only say that day, because we already have a motion returnable. That's your lease rejection motion. I mean, that might not be opposed, but... Hopefully not.

We can discuss that later. Perfect. Thank you, Your Honor. Further, in the revised form of order, the debtors have put entry of the 506C and the 552B waivers to be conditional upon entry of a final order. We know that was important for certain of the landlords. Finally, Your Honor, the committee,

which has not yet been appointed, will have a 60-day challenge period upon their appointment. Finally, Your Honor, there are certain milestones in the cap. That's what the original order said, right? That one I'm just flagged for you. Yes. I read it. Yes, stay the same.

And then finally, Your Honor, there are certain milestones set forth in the cash collateral order that require the debtors to take certain steps, including the confirmation order and the plan effective date. These are reflective of our RSA, milestones, so there are no additional milestones not otherwise set forth in our restructuring support agreement.

I didn't follow that. Can you say it again? Yes, Your Honor. The milestones set forth in the cash collateral order for the confirmation date and the plan effective date. Those are the same milestones as in our restructured and support agreement. Okay. I made that as confusing as possible. No, no, no. But that doesn't

sound like a change to me. No, no, no. That was just me flagging as well. Okay. Your Honor, unless you have any questions or of any other party as items they'd want to raise. We propose submitting a revised proposed order with the final language to footnote four to your chambers and respectfully request entry of the order subject to receipt of the revised. All right. Let me ask the U.S. trustee, have you guys – when do you expect you'll have a formation meeting? Your Honor, I'll speak to that. The morning.

Fran Steele on behalf of the U.S. trustee. We were provided with a top 20 of leaseholders and a top 20 of trade creditors with the email addresses, which was very helpful. So the notice has gone out already, and we

hope to receive and form a committee by the end of next week. That is if there's interest in a committee, Your Honor. So we're working as fast as we can. that it's important to get one in place.

Okay. Does anyone want to be heard on cash collateral on opposition? I mean, I'm happy to hear that some of the landlords had some input. Obviously, there's probably a host of potential general and secured creditors out here who have

not had an opportunity to digest all of this. So, that's why I asked about the committee, because I would assume that once one is formed and maybe the landlords can get organized and have a negotiation during the interim period if need be. Thank you, Your Honor, again for the record. Robert Lehain, Kelly, Dry, and Warren, on behalf of a number of landlords,

including New Veen, TIAA, and local council for all the Allen Mackin's parties. Your Honor, first, we certainly appreciate the difficult process that the debtor's been through. We have been engaged with counsel for the debtor since long before the filing and appreciate all the hard work that's gone into this and the comments that they did accept and we work through. I have one other provision that I would like to have be subject to a final order.

Had some brief conversations with counsel for the lenders and the debtor beforehand. That would be paragraph 16C in this order, which would Let me slow down, slide down. Sure thing. Let me get with you. What page is that on? 69, I believe. Yes.

I'm with you. So just to set the background, I understand that the length and the debtor have some concern about provisions and leases or contracts that may require consent or charge fees in connection with either the grant of a lien or there's language in here that would suggest it goes to the assignment of rights. Your Honor, I would ask that this be subject to a final order and we have some time to work through the issues with counsel for the lenders and the debtor. The debtor is asking for relief under Section 364 and we don't believe there's any provisions in 364 or otherwise in the code that would have been render any provisions and leases unenforceable, which would be the concept that this paragraph 16C says that specific provisions and leases are unenforceable as inconsistent with applicable provisions of the code. We don't believe it's necessary to have the discussion or argument today. We don't believe

it's an issue that will be immediate, and we have successfully worked through what we believe the concerns of the lenders and the debtor are with respect to this language that would still not specifically render any lease provisions unenforceable in connection with an assignment, a financing order, Your Honor. Okay. I mean, are you aware of lease provisions that prohibit the debtor from granting liens to their secured lenders? Or has that a quick... Yes, Your Honor. In fact, most of the office leases in these cases, and some of this has been dealt with in other changes that the debtors made, to make it clear that the liens don't attach directly to the leases. but rather to the proceeds of the sale of the leases.

Right. So there are, in virtually every one of these losses that we've seen, the debtor tenant cannot grant a lien directly on the lease without the consent of the landlord. And some are specifically prohibited from doing so. The debtors and the lenders have already agreed to modify other provisions of this in the scope of the liens that would resolve those concerns. This paragraph seems to be an outgrowth or another element.

element of the same concept, and again, would like to be able to take the time to discuss it further with counsel for the debtors and the lenders, and we believe interim resolution is to make the subject to the entry of a final order, or the ability to just discuss after this before the order is entered, Your Honor. All right. Ms. Foster, what do you say? Your Honor, I think it makes sense for us to take a quick break. I don't think we need to stop the hearing just to chat with the secured lenders' counsel as well as it. Mr. Leehane. Just want to make sure everyone's agreed before we submit a revised order.

We'll make sure that revised order fully reflects everyone's comments as negotiated. Yeah. Before we took a brief, there's someone on the on. Yeah, okay. Anyone else in court who's here physically want to be heard on Cache Collateral

because we do have a hand raised on Zoom? All right. Can we let the person speak? And the seats. Okay, I see a couple of people there. Good morning, Your Honor. I think it's Mr. Rosner

who wants to speak. This is Daniel Stoltz. Genova Burns on behalf of certain landlords. Mr. Rosder is my co-counsel. His prohack is pending. We'd ask to Your Honor, and allow him to speak this morning. Yes, absolutely. Welcome, Mr. Rosner.

Thank you, Your Honor. And good morning. And I raised my hand after the court asked a question about whether there are leases that limit or prohibit liens. We are council, and again, it's Douglas Rosner, counsel for landlord affiliates of Boston Properties, Beacon Capital, John Hancock,

WS, T, I think I suffered, Columbia Property Trust. Around 20 or so locations, we work locations. We have a reviewed all the leases, but almost all the leases do have limits and prohibitions. And this is actually a very important point for us, because if, when leasehold mortgages get granted, it creates issues on our mortgage lending side. And it also, we, we have concerns that it's, it could be used as almost like a backdoor way of assigning leases without following 365. If lenders such as soft bank,

who's an affiliate, is able to foreclose on the leases, assuming applicable law allows that, or this court allows that. They could take assignment of the leases without giving the landlords of protections that are in statute. Those are the two big concerns, the mortgage financing concern, and the ability to assign the leases without protections. I'm assuming footnote four is consistent with what some of one of the Kirkland attorneys sent around by email. I don't see what the attorney has handed up. And I think hopefully we can reach agreement.

The problem with 16C is that Romanette 1, where it essentially extinguishes the consent rights of landlords, is going to be inconsistent with footnote 4, which recognizes the consent of the landlords, and that's the concern. Your Honor, we spoke with Mr. Rosner this morning, and we will, of course, continue to speak with him as we resolve this issue. If it's okay with, Your Honor, I'm going to step out while the hearing continues and just work through this issue with Mr. Lehane, Mr. Rosner, Mr. Gold, as well as counsel, to the ad hoc group.

That makes sense. Thank you, Your Honor. Thank you, Your Honor. It sounds like there's not a whole lot of disagreement here. It's just a drafting issue. Exactly, Your Honor. We were just down to the water. But the debtor and the banks, you guys have clarified that the lien is not on the lease,

but the proceeds of the sale of the lease to the extent that occurs. That's right. That's right, Your Honor. I'm sure you guys can figure that out. I think so, Your Honor. With that, Your Honor, I'm going to hand it over to Mr. Paray, who's going to take us through the next portion of the agenda so that we don't hold up. Well, hold on.

Anyone else want to be heard concerning cash collateral? Trustees on board? Thank you, Your Honor. Peter Deoria from the trustees' office. We have had rounds of communications. Our revisions have been included. No comments on the most latest form of order. All right.

Well, listen, on cash collateral, I did review the order. It's lengthy, and there's a lot in there. But, you know, it is an interim order. It is essential for the debtor. There's no doubt that it's essential for the debtor to have access to cash collateral. I do expect that once, I mean, maybe the landlords might mobilize or will have a committee, and I would just urge them to engage with the debtor and the secured lenders here to the extent they have any issues with this. but I am prepared to sign an order substantially in the form that was submitted last night

and I think we just have to set the final hearing date which will be either that November date or a date in December. Have you discussed this with the court in advance? Have you guys proposed dates? No? Not yet, Your Honor. Do you have – what would you like? Yeah, Your Honor. I think the sooner hearing is better from our perspective, so November 28th and less any parties have any issue with that date.

Your Honor, apologies. Just to give everyone a little bit more time to make sure we're fully buttoned up for our second day hearing, could we actually do early December instead? What would you like to say, Mr. DeOrio? Thank you, Your Honor. We actually had dialogue about this. From our perspective, Your Honor, respectfully, of course, in deference to Your Honor's calendar,

we thought the December 6th date was better. Those extra eight days, given the number of matters, the size of the case, the intervening holiday and the need to form a committee, we're proponents of the December 6th date for a second day hearing. We recognize that the two lease motions were filed on normal times, and they're there for November 28th.

Those two motions can stand as scheduled. They're scheduled and filed under our local rules on normal time. But we respectfully support the December 6th date for the second day hearing. Can you get my calendar? I'm going to have to use my phone. The old-fashioned way. Yeah. Yeah, that's fine.

That's fine. We already have it in our calendar, so. Thank you, Your Honor. Okay. What time? Thank you. Time, Judge? What time on the 6th?

10 o'clock okay, or do you guys like 11 better? 11, if your honor, doesn't mind? Okay. Extra hour's sleep. Exactly. Beauty sleep, Your Honor. After this week, yes. Your Honor, unless you have any other.

All right, so with that, we're going to mark the press collateral motion. motion granted, revised order to be submitted, and we're going to fill in the second hearing date. And an objection deadline will be like a week before? Seven days before. Yep. 11 o'clock. You got that, Florey? All right.

Back to the binder. Thank you, Your Honor. And with that, I will introduce my colleague, Mr. Perrae, who will walk you through the next round of motions. Okay. Thank you. Good morning, Your Honor. For the record, Oliver Parre of Kirkland and Ellis, proposed counsel of the debtors.

Your Honor, it's privilege to be before you again this morning. I'd like to echo my colleague's sentiments thanking the Court for his time this morning. I'd also like to thank the Office of the United States Trustee, Ms. Steele and Mr. Dioria, they took many late night and early morning phone calls from us and helped get these motions in shape for you today and I very much appreciate the time. I'd also like to thank the... Standard procedure with the Office of the Senate. Unsurprising, but appreciate it all the same.

And I should also thank the staff here at the court, the clerk's office, in particular in my chamber staff, who, up to, you know, in the days leading up to this, did a lot of work in preparation. Yes, and in fact you anticipated what I was about to say, Your Honor. The unsung heroes of this case, the staff at this courthouse, and also the paralegals at Kirkland and Alice in Cole Schatz, who managed to get 517 petitions on file in a matter of hours. I'm told it's among the most average.

for a jointly administered case. They did an extraordinary job under considerable duress, and I'd like to thank them on the record. You're welcome. And I joined in your thanks. Thank you, Judge. All right, Mr. Perrae, what do you have? So I'll be taking us through the next eight items on the agenda, Your Honor. First is the debtor's cash management motion at docket number 20. This is also agenda item number three, and there is a revised form of order filed at docket number 74. I gather from your colloquy with Ms. Foster that you had time to review, but if not, I have red lines here that I'd be happy to bring to Your Honor to walk through. All right, so cash management is docket number 18? Docket number 20.

The revised form of orders at docket number 74. Oh, I got the wrong. I did have a chance to take a quick look at the revised order this morning, and I did notice the carve-out that we discussed during the cash collateral. motion is there anything else why don't you want did you just walk me through the changes and generally what you want here would be helpful to provide a red line yes you can hand it to hand it to me so as your honor mentioned the vast majority of these changes are just to embody the final agreement that the debtors reached

with JPMorgan the cash management bank these are in paragraph four of the order there are also a couple of cleanup changes that the debtors entered or effectuated in the motion to accommodate certain comments from the United States trustee, for instance to receive notice in paragraph 9. But as I mentioned, Your Honor, the bulk of the comments are to embody the final form of the agreement with JPM. All right, does anyone want to be heard on the debtor's interim order concerning cash management, bank accounts, books and records etc. Docket number 74 sir.

Your Honor, Scott Talmadge from Freshfield's, Brokastair, and J.L.L.P. on behalf of J.P. Morgan. If I could confer with counsel for a moment there, it might be a provision that we inadvertently didn't include that really doesn't affect most of the program, but just a very small piece of it. It's a non-controversial paragraph, but if I can confer for one moment, that would be good. Sure, sure. Your Honor, I think we could work this out on a break. I think we're going to have with respect to other matters here,

but I don't believe based on discussions that's controversial anyway. All right, and say your name again for the record? Scott Talmadge, Your Honor. Elmage? Your Honor. All right, so Mr. Talmadge and Debtors' counsel, you guys can confer. It's already revised order to be submitted anyway, so there'll just be maybe another revision, right? Yes, thank you, Your Honor.

U.S. trustee on board with the revised cash management order on an interim basis? Yes, Your Honor. Thank you. Good morning. the changes at docket entry 74. Counsel was generous enough to share with me the concept that needs to be edited. It doesn't seem controversial. This is a sensitive order for us, Judge.

I'm sure they'll share that with us as the day goes on. No objection to docket entry 74. Thank you, Your Honor. All right, so we're going to mark the cash management order for the cash management first day motion as granted, a revised order to be submitted by Debtors Council. Thank you, Your Honor. The next item on the agenda, Your Honor, is the Customer Programs Motion,

which was filed at docket number six and agenda item number four. The Governor's business serves over 100,000 customers in several time zones. The vast majority of their revenue comes from the debtor's space as a service product, which allow member companies to access anything from a single desk. to one or more floors of an office building. But as my colleague, Mr. Sarahedini mentioned in his opening remarks, with rising interest rates and weaker real estate market, landlords have started to lower rent and offer more flexible real estate terms,

all of which appeals to the debtor's target market. Now more than ever, in order to maintain their competitive edge, the debtors must continue to offer the suite of programs they use to attract new customers and to retain existing ones. Among others, these programs include refunds, membership credits, rebates, sales promotions, referral programs, and flexible payment options. And so, Your Honor, this motion seeks to pay pre-petition amounts owed on account of these customer programs and to continue making payments in connection therewith in the ordinary course of business post-petition.

The debtors have shared this motion with the United States trustee and incorporated their comments, and I understand that it's going forward on a fully consensual basis thereafter. So with that, Your Honor, unless you have any questions, we would respectfully request entry of the owners proposed. Does anyone want to be heard on the debtor's motion regarding customer programs and honoring pre-petition obligations related there, too? Docket number six. U.S. trustee, did you weigh in on this? Yes, Your Honor. We provided comments, and they were accepted by counsel, and we have no objection to the form of order.

Are the comments incorporated in the original motion filed with the court? It's incorporated with the order that was filed with the court, Your Honor. At document six. That's right. Document number six. All right, so I know there's, it's about 14 million of pre-petition obligations, and the order just says that you're going to pay them in the ordinary course. There's no dollar limit on an interim basis, right?

That's correct, Your Honor, no dollar limit. All right. Obviously, the debtor's relationship with – relationships with customers need to be preserved. And the Court will grant this motion on an interim basis, and we will schedule the final hearing on the second day, and objections due seven days before. Thank you very much, Your Honor. The next item on the agenda is the critical vendors motion filed the docket number 15. Your Honor, is one of the largest commercial real estate lessors in the world.

We work relies on the predictable array of vendors who provide building repair, pest control, daily enhanced cleaning and IT services. But as the pioneer in community-driven flexible workspace, we work is also reliant on a unique set of vendors, including suppliers of coffee, snacks, condiments, high-speed printing, and member service request management, without whom the company would be unable to deliver best-in-class service to its members. But some of these vendors, Your Honor, are not party to enforceable agreements and may cease performance if not timely paid.

Indeed, Your Honor, some vendors have already threatened to do so. Others are located abroad and are unfamiliar with Chapter 11. It might withhold post-petition performance on the basis of unpaid pre-petition claims, and still others may be entitled to assert mechanics liens or other liens under state law if their pre-petition claims are unpaid. In all cases, the uninterrupted service of these vendors is essential to continue to operation of the business and necessary to avoid immediate and irreparable harm.

And so this motion seeks relief to pay these vendors, pre-petition claims, and to continue partnering with these vendors in the ordinary course of business post-petition. Again, we've shared this motion with the United States trustee and incorporated their comments in the proposed form of order that now sits before, Your Honor. Unlike the customer programs motion, this one comes along with a $12 million cap.

I understand, having incorporated that, that the United States trustee is supportive of the requested relief. So, Your Honor, happy to answer any questions. you have, but otherwise we would request you enter the order as proposed. Yes, Your Honor. Franz Dale on behalf of the U.S. Trustee. Yes, Your Honor. The U.S. trustee received a list of the critical vendors in certain buckets from council,

which we reviewed. And based on our review, we believe that these critical vendors can be paid in order to preserve the estate. Anyone else want to be heard on the critical vendor motion, document number, 15. All right. The court will grant the motion on an in-term basis with a $12 million cap. The debtor is authorized but not directed to pay critical vendors in its business judgment. And we will upload and sign the order which attempts to document 15. Thank you very much, Your Honor. The next item for me is the wages motion. This was filed. that docket number 13, its agenda item number six. Your Honor, WeWork was founded to revolutionize the way people work and live while creating an inspiring and empowering working environment for its employees.

That includes the so-called non-community employees at WeWorks corporate office, but also the so-called community employees at WeWorks hundreds of lease locations. And while management, office culture, and the working world more broadly have changed since the company's founding, its people have remained at the center of this company's consciousness. Your Honor, this management team, many of whom are here today, and so many of their employees have dedicated their lives to this business, most recently by working nights and weekends to get this company ready for Chapter 11. This motion aims to be right by them and all of their employees, and preserve the business

for the benefit of all parties and interest. Specifically, this motion seeks relief to pay certain pre-petition amounts outstanding on account of the company's wages and benefits programs and to continue paying wages and benefits in the ordinary course post-petition. Once again, we've shared this motion with the Office of the United States Trustee, incorporated their comments in a proposed form of order that now sits before, Your Honor, and I understand that, again, the United States trustee does not oppose the requested relief. I'm happy to answer any questions you have, but barring that would request that the court enter the orders proposed.

Yeah, I think the key here is that during the interim period anyway, nobody is going to get more than the statutory cap, correct? That's correct, Your Honor. And, but you might want to do that down the road on a final basis. Correct, Your Honor. There are 17 employees who are entitled to, under their agreements with the company, to greater than the $15,150 cap under the non-insider severance program, we're requesting relief to pay the amounts above the cap pursuant only to the final order. Anyone want to be heard in opposition to the payment on an interim basis of the pre-petition wages of the debtor's employees?

there's no objection and the court will approve on any, the, no, there's a final order. No, it's just an interim order. Just an interim order, gone. We'll sign the interim order, and certainly the court agrees that the debtors, employees need to be paid on a regular basis and shouldn't miss a paycheck,

so we'll approve that in an interim basis. The order that was filed with the motion is, is acceptable, right? That's right, Your Honor. Okay. All right, so that's docket number 13. That's right, docket number 13. Okay.

Thank you, Your Honor. The next item for me is the creditor matrix motion filed the docket number 17, agenda item number seven. As I mentioned in my opening remarks, Your Honor, measured by number of entities. This is one of, if not the single largest Chapter 11 case in the past couple of decades. It follows that several of the administrative provisions in the bankruptcy code and the bankruptcy rules,

including the requirements that each debtor file a list of top 20 unsecured creditors and a matrix of creditors would be unduly burdensome in these Chapter 11 cases. The sizing complexity of the debtor's business also means that they are in possession of commercially sensitive information and personally identifiable information that could be harmful to individuals and the debtor's business interests if disclosed to the public. And so, Your Honor, this motion seeks relief to file a consolidated list, of the debtors unsecured creditors, file a consolidated creditor matrix motion, and to redact certain sensitive information

from pleadings and papers filed in these Chapter 11 cases. We've shared this motion with the Office of the United States trustee and incorporated certain of their comments in the proposed form of order that now sits before your honor. I'd be happy to answer any questions you have. But barring that, I understand that Mr. Deoria at the Office of the U.S. trustee would like to be heard on this matter as well. You want to be heard?

Yes, sir. Okay. Go ahead, Mr. DeGioria. Thank you, Your Honor, and good afternoon. Peter Gioria from the Department of Justice on behalf of the United States trustee. And if I could complete appearances, please, Judge, my colleague, Fran Steele at Council Table with me, but also from my office, the Assistant United States Trustee Martha Hildebrandt, and Francine Arendes, a financial analyst from my office, is also here today.

Welcome. Thank you. Thank you, Your Honor. Thank you, Your Honor. Thank you, Your Honor. Go ahead. Your Honor, this is one of the motions that has some sensitivity to it for us. We object to the relief as it is presented.

We recognize that we are here today on a request for an interim order and that there will be another hearing, but we would like to briefly outline our concerns. What is at issue here is the public filing of bankruptcy schedules, and the U.S. trustee is concerned with the extent to which the debtors seek redaction here. We look at Section 521 and Rule 1007 and take them together that they tell us debtors should file their schedules, listing names and addresses of their creditors. And while there, of course, can be exceptions, those exceptions should be extraordinary, not matters of commonplace. What the motion asks to redact is all information of all customers, the home

and email addresses of natural persons in the United States, and the names home addresses and email addresses of natural persons in Europe and abroad. In recent cases, the United States trustee has consistently taken the position that with regard to business entities, we take the position that the schedule should be completed and there should be no redaction. There should be full disclosure. Here, the debtors seek to redact all information of all customers. And the asserted basis for that is that the customer list is an important asset. This aspect of the motion is troubling for us. Every chapter debtor that has customers completes its schedules. There's nothing extraordinary about a party being a customer. Nearly being a customer is not a basis

to list someone owed money on a list of creditors or someone who... Customers aren't creditors, are they? If they are, they would be on Schedule ERF. If they're a counterparty to a contract, they would be on Schedule G. In our view, disclosing that information is essential public disclosures, fundamental to transparency and to the bankruptcy system. With regard to individuals, the U.S. trustee agrees that home addresses and email addresses may be redacted, but we take the position that names of individuals in the U.S. and abroad

should all be disclosed. In these cases, this redaction issue has come up in recent cases, but the fact patterns are not all the same. In these cases, we're talking about debtors that lease office space for business purposes. The debtor's customers are businesses, or their individuals engaged with the debtor to conduct business. There's nothing particularly sensitive or extraordinary about that, which justifies incomplete schedules. Again, Your Honor, we recognize that this cannot all be parsed here today at a first day hearing and that the court will likely consider interim relief today. What about, like, in the U.K., if it's a violation of the law in the U.K., should we make him do it anyway?

It's our view, Your Honor, that Your Honor, and the Bankruptcy Code is a legal basis to disclose the name only. Name only? That's what they want. There's a divide on individuals, Your Honor, in the motion. Individuals in the United States, name only, individuals outside the United States, complete redaction. No name. But what I was going to conclude with, Your Honor, was that we wanted to voice our concerns. We understand we're here on an interim hearing, but we respect for the reserve all rights on a final order. Well, there's going to be extension of time of file schedules, right?

And that's going to be like, what are you, for 46 days or something like that? Yes, Your Honor. From today? Yes, Your Honor. What do you guys think? I mean, is the customer list, I assume you want to keep that out of the public record? because you intend to continue doing business? I mean, I've got to believe that these people who do business with WeWork,

you know, are you afraid of them being poached by your competitors? That's right, Your Honor. That's actually a very real concern. This is not an abstraction. There have been examples of competitors camping outside of WeWork locations with a table and a sign saying WeWork is may file for Chapter 11. We will not file for Chapter 11 and very clearly trying to poach. the debtors customers. It's also the case, as I mentioned before, that with a decline in commercial

real estate markets, landlords are becoming a real competitor to the debtors, trying to disintermediate and go to the debtor's customers directly. So I believe that 107B, Your Honor, exists for precisely this purpose. And I think that cause is very much here to grant the relief the debtors are requesting. As Mr. Dioria said, though, this is something that will take up on the final order. And you also mentioned that you're concerned about customers, people's individual security for some reason. I mean, that's right. You're right. I'm not aware of any particular case in this case where an individual's personally identifiable information was divulged in a way that ended up threatening their personal safety or finances or the like.

But I do know it has happened in past cases. There are many thousands, if not hundreds of thousands of people who work at member companies at we work. and it's important to the company to protect their people. And any risk that personally identifiable information, if somebody's a creditor in some way, that that could somehow be disclosed to the public is a very large concern for the company. All right.

Well, this is interesting. I did read it. I didn't expect an objection, but it sounds like the U.S. trustee might want to file a formal objection. to some of the relief requested here. Is that right, Mr. Deoria? That's under consideration, Your Honor. All right.

I guess I'm more concerned off the top of my head. I mean, I'll obviously consider all arguments, but I am more concerned about the customer list. So you want to do this on an interim basis? Did you submit an interim order? Yes, we did, Your Honor. It's a docket number 17. The papers that's filed are structured that way, Your Honor.

What else? Anything else? It's just that the issue of, the identity of the counter parties to contracts and... It boils down... Sorry, Judge. No, go ahead. It boils down to disclosure of information

with regard to business entities, non-individual business entities, and names of individuals abroad. It boils down to that, Your Honor. We do not dispute the debtors requested relief that individuals in the United States disclose names only and redact the other. additional information. We do not oppose that.

Well, I mean, they're going to get notice, right? I mean, you're going to have to certify that you provided the notice of the case, right? That's right, Your Honor. The counterparties and creditors, but not with all the equity holders. That's not a piece. No, not with equity holders,

Your Honor. We're requesting relief. Certainly in the case of we work Inc. Topco, we're requesting relief to waive that requirement. Although I'll have that notice will be given to the registered holders with a us to pass the same along to beneficial holders. Yeah, I read that. Okay. And you have no objection

to that, Mr. Dioreo, just the registered holders getting notice on the equity side? No objection to that, Your Honor. And with regard to notice, Your Honor, I believe it's paragraph 13 in the motion as it's filed. Even though we have this dispute between us, they still considered our comments on the form of order. And we asked them to include a paragraph that clarifies that underlying service will indeed be served, regardless of redaction on schedules. That's been acknowledged between us, and a clarifying ordered paragraph to that effect is in the order. Regardless of how this ends, service will be accomplished, Your Honor.

What if they showed all the names to your office and the committee and any ad hoc committee and anybody who signs like a confidentiality agreement just so they know who's looking for it? That's already in place, Your Honor. the concern that we have is the public disclosure of bankruptcy schedules and disclosing creditors and disclosing counterparties to contracts. The schedules don't have a spot for listing customers. The schedules have a spot for listing creditors and contracts. And in those respects, with regard to business entities who are not individuals, it's the

the United States trustee that those schedules should be completed. All right. We're going to have to give us something to do between now and the final hearing. There has to be one thing, Your Honor, right? That's okay. We have plenty of good, smart people here

to tear into this issue. All right, so we'll do the interim order. Where's the language that covers you, Mr. DeGio, in the interim? did you just refer to it? The order is structured as an interim order, Your Honor, so the right to come back at the final hearing is built in. The paragraph that I was mentioning to you

that my colleagues were gracious enough to include at our request, even though we don't agree on some of the underlying aspects of the motion, is 13. I thank them for that, and it might speak to Your Honor's thought that regardless of how this ends, underlying service will be accomplished. All right. Anyone else want to be heard on the motion for an interim order and final order to file a consolidated list of 30 largest creditors,

et cetera, et cetera, document 17? All right. The court's going to grant the motion on an interim basis, and the U.S. trustees' arguments concerning redaction are preserved for the final hearing. You'll get papers in at least a week before, if need be. If need be, if we file, yes, sir. If you can't resolve it. And what about – We'll make it.

We'll do the same if we're unable to resolve it consensually. Okay. So you're going to file them simultaneously? We'd file a response, Your Honor. All right. Just get it to me at least like a day or two before the hearing. Okay. All right.

Thank you, Your Honor. Very good. Docket 17. the motion is granted the court will upload and sign the interim order that's attached at document 17. And we have to fill in the, do we have to fill in the dates on all

these, don't we? Okay. If it be helpful for your honor, we can pass a long word version so it's easier to fill in the dates. All right, we'll figure that out at the end. Thank you. The next item on the agenda, Your Honor, is the debtor's NOL motion. This is filed the docket number 16 and agenda item number eight.

Your Honor, as of the petition date, the debtors estimate that they have approximately $7.7 billion in federal net operating losses and other favorable tax attributes. Needless to say, the ability to offset these NOLs against current and future earnings is of considerable value to the debtors and to all of their stakeholders. But under the Internal Revenue Code, ownership change is caused by certain transfers of or declarations of worthlessness with respect to the debtor's equity could limit the debtor's ability to capitalize on these favorable tax attributes. So by this motion, the debtors seek to institute limited procedures and notice requirements that would allow the debtors, if necessary, to expeditiously seek an order in joining transactions that would reduce their NOLs and therefore diminish the value of the debtors' estates. Specifically, this motion seeks entry of an order approving procedural relief related to transfers,

exchanges, issuances, and declarations of worthlessness, and directs that holders of the debtor stock who wish to make such transfers or declarations not in keeping with this notice and these hearing procedures are void ab initio. Your Honor, we've shared this motion with the United States trustee and once again incorporated their comments, and I understand that the United States trustee does not oppose the requested relief. So I could answer any questions Your Honor has, but otherwise we would respectfully request that the court enter the order is proposed. Does someone have their hand raised on Zoom? Does anyone want to be heard on the NOL preservation motion?

I'm inclined to approve this on an interim basis. I agree that the debtor's NOLs could be valuable to this estate. And the motion just requires shareholders to provide notice of contemplated transactions and gives the debtor a chance to weigh in if they think that the transfers may impact the NOLs. I'll grant that on an interim basis. Trustee, you're okay with that, Mr. Deior? Yes. Yes, Your Honor.

No objection. Thank you. Thank you, Your Honor. Next, if it's okay with Your Honor, I'd like to jump around the agenda a bit to number 15. This is the Foreign Representative motion filed the DACA number 8. Your Honor, as a global organization, the debtors cannot effectuate a comprehensive restructuring without seeking certain relief in foreign jurisdictions. Specifically, the debtors intend to commence recognition proceedings under the company's

Creditors Arrangement Act in Ontario, Canada. And in order to commence the Canadian proceeding, the debtors require authority for a debtor entity to act as the foreign representative on behalf of the debtors of states. Once appointed, the foreign representative will facilitate coordination between these Chapter 11 cases and the Canadian proceeding and provide an effective mechanism to protect and maximize the value of the debtor's of states. So you're honored by this motion, the debtor seek entry of an order authorizing Debtor WeWork Inc. to act as the foreign representative on behalf of the debtors of states and

requesting the aid and assistance of the Canadian court to recognize the debtors Chapter 11 cases as foreign main proceedings under the CCAA. Once again, we shared this motion with the United States Trustees Office and incorporated their comments in the proposed form of order that now sits before, Your Honor. Be happy to answer any questions Your Honor has, but otherwise, we would respectfully request that you enter the order as proposed. Does anyone want to be heard on docket number eight, the motion for entry to authorize we work to be foreign representative and file in Canada. I'm inclined to grant this motion. I've reviewed it. And if you have to file some related proceedings before the Canadian court, you should be authorized to do so.

Thank you very much, Your Honor. The court will grant the motion. This is on a final basis. Document number eight, the order is attached. We'll sign that order. Thank you, Your Honor. The last item for me on the agenda is the case management motion. This was filed that docket number 18 and agenda item number 16. This last motion for me, Your Honor, is purely procedural and meant to streamline these Chapter 11 cases, particularly for cases of this magnitude and complexity. They can save valuable time and resources to establish certain procedures for noticing, filing papers, and other matters.

So we look at this relief as, again, purely procedural and beneficial for all parties in interest. We've shared this motion with the Office of the United States Trustee and incorporated their comments in the form of where they now sits before, Your Honor, and I understand there, once again, supportive of the requested relief. What docket number is this? This is docket number 18. Yeah, I didn't have any questions on this. Does anyone want to be heard on the

docket number 18 motion for entry of an order establishing case management and administrative procedures? The order that's filed, Your Honor, includes our comments. Okay. Thank you, Your Honor. All right. The court will grant the motion

and upload and sign the order that's attached to document 27 and this is a final order administrative. Clearly administrative. That's right, Ryan.

Thank you very much. And with that, I'll cede the podium to my colleague, Mr. Ryan. Morning, Your Honor. Good morning. For the record, Jimmy Ryan of Kirkland Ellis, proposed counsel of the debtors. It's a pleasure to appear before you

this morning, or I suppose this afternoon, for the first time. And I echo my colleague's sentiment and that is taken an extraordinary effort by all parties to get here. I'll be walking through the balance of the motions on the agenda, starting with the debtor's tax motion, followed the docket number 10, which is item number nine on the agenda. Your Honor, through the taxes motion, the debtors are seeking authority

pay approximately $8.9 million in pre-petition amounts owed, which were incurred in the ordinary course on account of personal property taxes, foreign taxes, income taxes, sales and use, taxes, among others. The motion also seeks authority to pay such taxes in the ordinary course on a post-petition basis and to undertake certain tax planning activities to provide the debtors with flexibility as they undergo a comprehensive restructuring. With respect to the post-petition amounts, the debtors believe that the requested

relief is merely one of timing, as some of the taxes and fees may be entitled Post-Potation Priority under the Bankruptcy Code. Your Honor, the debtor's timely payment of taxes and fees is critical to the continued and uninterrupted operations of their business. The motion was shared with the United States trustee in advance of filing, and we believe we're moving forward here on a consensual basis. So unless you have any questions, you respectfully request that you enter the proposed form of order. Yeah, I have one question about these entity conversions in paragraph 12 of the, application it says that I guess for tax purposes the debtors can convert debtor entities from one form to another conversion merger or otherwise and

they're allowed to modify intercompany claims and move assets and liabilities among debtor entities I assume it's just for tax purposes but it is I yeah I think the the request and relief your honor here is is just primarily to provide the debtors with optimal flexibility as they navigate through these complex draft 11 proceedings. We don't yet know what the plan of reorganization will look like from a tax perspective, notwithstanding the RSA. And so this is just to like provide us with, you know, optimal flexibility. That's it. All right. Well, you all know that Section 363 applies, and if you're going to do a major transaction outside the ordinary course that...

Yes, of course, Your Honor. You would file a motion to court. So I was just a little concerned. I'm not, honestly, I'm not sure, and maybe you don't know what that is or what that would look like down the road. But I just wanted to flag that because you can't transfer assets from one entity to another, you know, without some disclosure and court approval, I don't think. No, understood, Your Honor. If we were going to seek anything outside the ordinary course, we would file a motion and request court approval. All right. Does anyone want to be heard on docket number 10, the motion for authority to pay certain taxes and fees?

All right, I hear no objections. The U.S. trustee is on board with the motion. Yes, Your Honor. No objection. We provided comments, and they were incorporated into the order. Okay. The court will grant this motion on an interim basis. Is it an interim or final?

Yes. It's an interim final. The court will sign the interim order uploaded. at docket number 10 and scheduled the final hearing for December 6 I believe is what we agree with to. Very good. Granted. Thank you, Your Honor. Your Honor, the next item on the agenda is the debtor's application to retain Epic, his claims in noticing agent, which was filed at docket number five, and is item number nine, or sorry, number 10 on the agenda. As my colleagues indicated, these Chapter 11 cases include 517 debtor entities and thousands and parties in

parties in interest all over the world. EPEC has a vast array of experience in dealing with large and complex Chapter 11 cases, and the purpose of the application is to ease the administrative burden on the estates, which might be one of the largest Chapter 11 cases of the year. In connection with EPEC's retention application, the debtors also filed the declaration of Catherine Tran, which is attached to the application as Exhibit B. At this time, I would ask that the court

move Ms. Tran's declaration into Eightyer's. evidence? Does anyone object to the entry into evidence of the declaration of Ms. Tran, Exhibit B to document number five. All right. Exhibit B, the Tran Declaration is in evidence. Thank you, Your Honor. Your Honor, ethics retention application is unopposed in the proposed form of order reflects comments from the United States trustee, and so unless you have any questions, I would respectfully request that you enter the proposed form of order. Yes, Your Honor. The Trustee has no objection. All right. Well, I think we need

EPC or someone like them, certainly in this case, and I will approve the engagement of EPEC as the noticing agent claims agent subject to their retention

agreement. Thank you, Your Honor. Your Honor, the next item on the agenda is the debtor's utilities motion, filed at docket number 11, and is item number on the agenda. Your Honor, at its core, the debtor's business is predicated on its customers have a great experience every single time they walk into a WeWork location.

And without continued and uninterrupted access to vital utilities such as electricity, water, heat, gas, and internet, the debtor's business would grind to a halt. Thus, the utility's motion seeks customary relief prohibiting utility providers from altering, refusing or discontinuing utility services while the debtors navigate through these Chapter 11 proceedings. The motion also seeks authority to approve the debtors proposed adequate assurance, resolving implementing procedures to resolve adequate assurance disputes, and to honor any pre-petition amounts owed to the debtor's utility agent and to pay such fees in the ordinary course on a post-petition basis.

Your Honor, we shared this motion with the United States Terrestee in advance of filing, and believe that they are signed off in the order. It is a matter of housekeeping. We did file a revised form of order last night after receiving comments from some of our landlords. That revised form of order was filed at docket number 73. I have a red line here for your honor if you would like. Yes, please. I did see it on the docket this morning, but...

The changes are into paragraph 6. Just making clear that nothing in the... the order affects the rights and obligations of the debtors and their landlords under 365, and then a minor cleanup clerical cleanup in paragraph 12. I believe this resolves the landlord's informal comments, and I believe this motion is now moving forward on a fully consensual basis. And so unless you have any questions, I would respectfully request that you enter the order. You're going to fund a million dollar account, and that's going to be the backstop.

for the that's the adequate assurance account your honor that that account was set up at JP Morgan okay and I assume I guess all these utility providers haven't gotten notice yet right I just got it today they might have just got it today I would have to check with Epic I don't know I don't believe there's affidavits of service yet filed on the docket but they should be getting noticed to the extent they haven't already if if they have I can get you a we can file affidavit service on the docket as soon as possible. I'm sure you'll do it anyway.

No, I mean, this is a standard utility adequate protection program, and I'm happy to approve it on an interim basis. Just make sure you serve the utilities, and you'll probably be hearing from some of them. Thank you, Your Honor. And if you can't resolve, we'll see you at the final hearing. Understood, thank you. Got it.

I said docket number 11 approved on an interim basis. We'll upload and sign that order and we'll put in the final hearing date. Thank you, Your Honor. Your Honor, I believe the next item on the agenda is the debtor's insurance motion, which was filed at docket number seven and is item number 12 on the agenda. Your Honor, given the debtor's business, it is critically important that they maintain adequate insurance coverage during the pendency of these Chapter 11 cases. Maintaining adequate insurance is also required under various state laws and regulations

and is also in addition to the U.S. trustee guidelines. A failure to maintain insurance coverage during the pendency of these Chapter 11 cases may result in liabilities and additional costs at a time when debtors can simply not afford it. With respect to the surety bond program detailed of the motion, Your Honor, the debtors primarily use such surety bonds as a backstop for some of their lease obligations. So this motion seeks authority to pay pre-petition insurance costs, maintain the ability to amend, terminate, or otherwise enter into new policies in the ordinary course, and maintain their surety bond program in the ordinary course,

and to satisfy any pre-petition amounts owed there to. As a matter of housekeeping, Your Honor, we've received some informal comments this morning, right before the hearing from some of the lenders and we have agreed to strike some provisions in the proposed form of order we did not have time to file that on the docket in advance of the hearing so if you'd like I can walk you through those changes now if you have the order in front of you yeah let me get to it hold on a second okay where's the change it's in the interim order what yes your honor it is page five paragraph five

Romanette 4 We have agreed to strike the word canceling from Romanette 4 and we will be adding at the end of Romanette 4 the phrase, consistent with the term thereof. So in essence, all this does is maintain this structure and then say the only time the debtors will have the ability to revise or otherwise supplement the surety bond program is in connection with the terms of those

underlying surety agreements. So the secured lenders didn't want you to be able to cancel under paragraph 5? Your Honor, the... So you're deleting the word canceling. Yeah, so my understanding from the lenders is that the debtors are not party to their specific... Sorry, not the lenders, the landlords,

is they're not part... There's some surety bonds that are not... The debtors are not a party to. and so their position for in order to have consensus we we just agreed to delete that phrase because you know the debtors don't really have the authority to do so if they're not a party to the underlying agreement and so that that's all that was there to do there is a hand up we have a zoom participant who wants to speak yes your honor it's daniel stultz on behalf of the landlord mr rosner alerted me to this change and my understanding is that the change was requested by the landlords,

not the security creditors, the purpose being to eliminate the ability under this order to cancel surety bonds, which would stand as guarantees for the landlords. And the way it should read is at Romanette 4, it just should say, revising and or supplementing the surty bonds and then go to consistent with the terms thereof so that all of the provisions that talk about canceling the Shuri bombs will be deleted in both Romanette 4 and Romanette 5.

So it will just, where it starts with Romanette 4 where it says canceling that will be deleted and then what was paragraph Romanette 5 renewing, supplementing and canceling letters of credit or other forms of collateral that may be necessary will also be deleted and then inserted

will be consistent with the terms thereof. That's my understanding of how. how it will read or it should read. That's correct, Your Honor. All right. Well, thank you, Mr. Stoltz, for that clarification. Anyone else want to be heard on the insurance motion? Good afternoon, your honor. Scott Zuberb, Keiza Shahidini and John Tomasi.

I represent Chubb, federal insurance, which has issued some surety bonds. I'm not going to take a position today, but just want to reserve the rights for the final hearing, especially with respect to these changes, which I haven't had a chance to look at. All right. Well, certainly, I'm sure the debtors would love to talk to you. I don't know if this is sure not. I'd have a chance to read it and look at it. So I'd like to just.

Yeah, this is just an interim order in certain. What does Chubb do, you guys insure the debtors? Mostly at least guarantee bonds. Lease guarantee bonds. Yeah, we, I believe, are fully collateralized. So I just need to have some time to review the proposed changes to the interim order and reserve rights for the file here. Yep.

Thank you, Your Honor. We're happy to send counsel a revised form of order before it. submitting to chambers. All right. Chubb reserves rights for the final order. They've done so on the record, and we're going to approve the insurance and surety coverage motion on an interim basis, and we're going to mark this one revised order to be submitted by the debtors' counsel. Is that okay with you? Yes, Your Honor. Thank you. Your Honor, the next item on the agenda that I would like to go through is the debtor's proposed motion to extend time to files their scheduled and statements, which is filed at docket number nine and is item number 13 on the agenda.

The Honor, here the debtors are seeking a 46-day extension of the 14-day deadline to file their scheduled and statements for a total of 60 days from the petition date, which I believe would bring the new deadline to January 6th of next year. The debtors are also requesting an extension to file their initial reports for financial information with respect to entities in which they hold a controlling or substantial interest in pursuant to bankruptcy rule 2015.3 to the 30 days of the later of the 341 meeting or 60 days after the petition date, whichever is later. Yarnah, we shared this motion with the U.S. trustee in advance of filing and believe that this is moving forward on a fully consensual basis. And so unless you have any questions, I would respectfully request that you enter the proposed

form of order. How can we couldn't get the full schedules done before you filed? I don't know. This motion seems fine to me. Ms. Deere. Yes, Your Honor. We have no objection to the extension. The U.S.

trustee has preliminarily set December 13th as the date for the 341 hearing, but we're waiting for confirmation that the debtors' representatives will be available. And we intend to go forward on that date without the schedules to begin the 341, and it may be then adjourned to a later date once the schedules are filed.

So you're doing individual schedules for every case? Correct. And what about monthly operating reports? I don't think we yet have had that conversation. Your Honor, although the joint admin order does provide that the debtor, pursuant to the U.S. Trustee Guidelines, will be filing monthly reports in each case for each debtor under the lead case. But that could be a conversation.

I heard silence. I don't think it's a conversation. Right. But not for today, Your Honor. I don't care if they do them. Just don't follow them on the docket. Yeah, I don't know. I mean, that's a heavy lift right there.

And I don't know what these guys want to do. So I'm sure they'll work with you and try to figure something out. Yes, Your Honor. We'll be sure. We're not deciding anything on that today. Thank you. All right. extension of time docket number nine there's a proposed order motions

granted January 6th is the current deadline without prejudice to further extensions if need be that motion is granted thank you your honor and we'll sign the we'll sign the order that was submitted and attached to document number nine thank you your honor moving to the last item on the agenda the debtor's motion to reinforce and reinstate the worldwide automatic stay, which was filed at docket number 19 and is item number 14 on the agenda. Docket what? Docket number 19.

Your Honor, WeWork is the global leader and flexible workspace. In particular, the WeWork global real estate portfolio comprises over 750 leases approximately 600 landlords with locations in six continents. and is supported by a network of thousands of vendors globally. Your Honor, such foreign vendors and creditors may be unfamiliar with the Chapter 11 process, the scope of a debtor's ability to operate in the ordinary course during Chapter 11, and the importance and effect of the worldwide automatic stay. So by this motion, Your Honor, the debtors are seeking an order reinstating and enforcing the worldwide automatic stay,

so faxso protections and anti-discrimination protections as provided for in the bankruptcy code. To be clear, Your Honor, this motion does not seek to expand or enlarge those protections. It merely seeks court authority to effectuate what the bankruptcy code already says. In previous Chapter 11 cases, including cases in this court, we have found such an order to be helpful when dealing with cross-border issues to have court-approved notice that the debtors can send to stakeholders who are not familiar with Chapter 11.

Your Honor, I understand that Mr. Gold has clerical edits that we have yet to see, and so subject to those edits, I believe that this is moving forward on a fully consensual basis. We have shared the motion with the United States trustee and believe they are also signed off,

And so, like I said, subject to those edits, we would respectfully request that you enter the proposed form of order. Does anyone want to be heard on the motion for an order restating, enforcing the worldwide automatic stay, ipso facto protections, et cetera, docket number 19? Where's Mr. Gold? No objection from the U.S. Trustee, Your Honor. Okay. Do you want to be heard, Mr. Gold on this? Good afternoon now, Your Honor.

We have an agreement in principle with the debtor, just some wordsmithing on some language at the beginning of the order. I would anticipate you'd have something uploaded before the end of the day. It's pretty minor stuff. Just some cleanup. All right. Is that okay with people? Yes, Mr. Ryan? Okay.

Thank you. All right. So the motion is granted, and we'll mark this revised order to be submitted. Thank you, Your Honor. I would cede the podium to my colleague, Ms. Foster. Hello. Welcome back. Thank you, Your Honor. Kira Foster, Kirkland-Nellis, proposed counsel to the debtors. Your Honor, good news. We have resolved the open issue on the cash collateral order. We'll be submitting revised proposed order to chambers, hopefully a little bit later this afternoon. All right. Well, thank you for doing that and thank whoever else participated in the process.

Thank you to the parties for working so constructively. Your Honor, separately on the cash management motion, I believe we are all set there as well, subject to submission of a final revised or closed order. With that, Your Honor, unless you have any questions, I believe we are done for this afternoon. What happened to the motion to, did we consider the motion regarding the lease assumption and rejection?

Your Honor, that one? Second day. Yes, Your Honor, that is coming up. was not for today? That was not, sir. No, that was the one for the procedures, negative notice and stuff like that on, on lease rejections, second day? Okay. Oh, so that's also, so you're rejecting specific leases on November 28th, and you want me to prove the process for rejection, assumption, and assumption, that's on the 28th? Correct, Your Honor. All right, I thought it was today. All right. Well, thank you all. I would like to thank counsel for your wonderful presentations, and the papers were excellent as usual. I want to wish luck to management, and I hope you all can turn this company around and make a go of it.

And thanks, as always, to the Lenders Council for working with everyone, the landlords. I know you all have worked hard. Of course, I'll thank again the office the United States trustee and the court staff here. But it was great seeing you here today. We'll see you after Thanksgiving, if not sooner.