Landlords that are not renegotiating leases with beleaguered WeWork could draw on letters of credit (L/Cs) to receive rent the bankrupt co-working giant is withholding, the company said in a filing.

The flexible workspace provider is seeking fresh financing with the aim of negotiating lower rents with landlords and exit bankruptcy, it said in the filing.

Petitions refuted

A federal judge has received requests from around 20 landlords urging WeWork to fulfil its rental obligations, alleging that the company is withholding payments in violation of bankruptcy regulations.

WeWork has refuted these claims, asserting that landlords could receive payment through alternative methods, such as L/Cs, instead of relying on funds from its diminishing financial resources.

WeWork's position

In the filing, WeWork highlighted that the "vast majority" of landlords who have not received payment have access to L/Cs and surety bonds, which were established to guarantee their compensation.

The company further argued that landlords could also be reimbursed using the conventional security deposits commonly submitted by renters upon lease signing.

As part of its Chapter 11 bankruptcy reorganisation, WeWork is focused on raising additional funds mainly to pay rent on buildings used by its customers, while it determines which premises to keep and which to which to shed in its global property portfolio.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.