Kirkland & Ellis LLP has submitted a billing request exceeding $48 million for its representation of WeWork Inc. during the company’s bankruptcy proceedings. The fee request was filed with the US Bankruptcy Court for the District of New Jersey, covering services rendered from the initial filing in 2023 through the approval of WeWork’s restructuring plan in June 2024. Hourly rates for Kirkland attorneys ranged from $685 to $2,465, demonstrating the substantial financial stakes involved in high-profile bankruptcy cases.
The restructuring plan, approved in June, aimed to alleviate WeWork’s financial woes by reducing debt, eliminating unprofitable leases, and distancing the company from the controversial era of its former CEO and founder, Adam Neumann. The bankruptcy emerged as a significant turning point for the company after its aggressive expansion strategy and the pandemic’s impact on office space demand led to financial instability.
In addition to Kirkland, Paul Hastings LLP, representing WeWork’s official committee of unsecured creditors, is also seeking compensation. The firm has billed approximately $14 million for its services, with hourly rates ranging from $470 to $2,300. These legal fees are expected to be covered by WeWork as part of the Chapter 11 proceedings.
An entity backed by Yardi Systems, a firm involved in developing office management software with WeWork, now holds a 60% stake in the restructured company. Former creditor SoftBank Group retains over 16% of the equity, whilst junior bondholders receive around 4 cents on the dollar. Unsecured creditors are projected to see a return of 1 cent on the dollar.
The bankruptcy case title is WeWork Inc., Bankr. D.N.J., Docket No. 23-19865-JKS, 11/6/23. For further details, see the full article here.