Lawyers for troubled co-working company WeWork and some of its London landlords clashed in the High Court today (9 April).
The landlords of WeWork’s flagship London South Bank venue on York Road, SE1, and its Devonshire Square, EC2, office are taking legal action seeking the cancellation of the leases because of the company’s US bankruptcy proceedings. WeWork is opposing the lawsuit.
“The rent and other sums due under the leases are fully up to date, but nevertheless the landlords support the claims for forfeiture, principally under the grounds that the guarantor of each of the leases has filed a Chapter 11 petition in the US bankruptcy courts,” said James Ballance, the barrister representing WeWork.
WeWork’s case, according to an e-mailed statement, is that the guarantor entity did not file for Chapter 11.
During the hearing, the landlords’ barrister, Simon Johnson, said that WeWork’s defence, at this stage, was “inadequate” because the company’s restructuring affected the nature of the guarantee.
“Two companies came out of the plan of division, which were not the same thing as the original guarantor,” he said.
Today’s hearing was a technical case-management meeting, during which lawyers seek guidance from judges about how to streamline and best organise complex litigation in the months, and sometimes years, before they go to trial.
WeWork’s legal team asked High Court judge Deputy Master Smith for permission to file part of its defence as a so-called “rejoinder” document as a way to better organise the proceedings.
Deputy Master Smith told them to write a draft rejoinder document and said he would decide after he had seen it. He gave WeWork extra time to file the next part of its case.
