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The American Lawyer@AmericanLawyer
Firms have been remarkably proactive in building up their bankruptcy practices over the last three years, energizing the lateral market long before the arrival of the anticipated downturn.
After the debt bubble burst a dozen years ago, a cascade of business failures turned bankruptcy practices into a bright spot—and set off a rush for talent—among law firms grappling with the Great Recession.
More than a decade after the last recession, threats to the economy’s health are slowly becoming apparent as more indicators point to an imminent slowdown. But unlike the sudden worldwide financial crisis of the last decade, the slow plod toward the next recession has allowed law firms to be more deliberative in building out their bankruptcy and restructuring practices.
https://www.law.com/americanlawyer/2019/10/29/its-coming-looming-recession-keeps-bankruptcy-partners-on-the-move/
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WeWork - scandal
It’s been a tumultuous few weeks for WeWork, and several large law firms are working through each step of the unfolding drama.
Less than a year removed from a $47 billion valuation, the co-working space operator saw its valuation drop to less than $10 billion, had its CEO ousted, is projected to lay off around 2,000 employees and has canceled its much anticipated initial public offering.
The latest developments in the dramatic saga include WeWork’s primary investor, SoftBank, giving WeWork founder and former CEO Adam Neuman a $1.7 billion golden parachute to leave the company and give up his voting power.
It’s been a tumultuous few weeks for WeWork, and several large law firms are working through each step of the unfolding drama.
Less than a year removed from a $47 billion valuation, the co-working space operator saw its valuation drop to less than $10 billion, had its CEO ousted, is projected to lay off around 2,000 employees and has canceled its much anticipated initial public offering.
The latest developments in the dramatic saga include WeWork’s primary investor, SoftBank, giving WeWork founder and former CEO Adam Neuman a $1.7 billion golden parachute to leave the company and give up his voting power.
This is on top of a $500 million stipend to pay off a loan and a $187 million “consulting” fee the bank is giving Neuman, much to the chagrin of analysts.
Prior to Neuman’s exodus, WeWork was hoping to bring in about $3 billion from its IPO and another $6 billion in bank funding post-IPO, The Wall Street Journal reported. But now that the IPO is off (for now), the company could find itself in a position where it is bleeding cash with no reliable source to replenish the coffers.
WeWork withdrew its initial public offering after the company apparently made a series of changes to its initial IPO filing and omitted other details deemed pertinent to the filing, the Journal reported. For instance, the company amended the number of additional workstations added for the year from 273,000 to 106,000. The prospectus apparently also had to be adjusted when the gross income from those stations, stated initially at $1.3 billion, was changed to $800 million. Why? Apparently the numbers were just “wrong”, sources told the Journal.
The company’s prospectus failed to disclose the ownership of a $60 million Gulfstream G650ER (a private jet that is now for sale) and made no mention of Neuman’s sale of hundreds of millions in company stock since the company formed in 2010. Although not required by the SEC, failure to disclose stock sales by company executives doesn’t tend to sit well with prospective investors.
WeWork does still plan on going public, but the timing for that move is now in flux. With Neuman forced out, co-CEOs Artie Minson, formerly the company’s co-president and chief financial officer; and Sebastian Gunningham, who was vice-chairman, told The Washington Post that the company is going to focus on its “core business” for the time being.
“We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future,” the co-CEOs wrote in a statement.
Link: https://www.law.com/americanlawyer/2019/10/27/deal-watch-wework-drama-spins-off-work-to-multiple-big-firms/
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You Can't Manage It If You Don't Measure It
Prior to Neuman’s exodus, WeWork was hoping to bring in about $3 billion from its IPO and another $6 billion in bank funding post-IPO, The Wall Street Journal reported. But now that the IPO is off (for now), the company could find itself in a position where it is bleeding cash with no reliable source to replenish the coffers.
WeWork withdrew its initial public offering after the company apparently made a series of changes to its initial IPO filing and omitted other details deemed pertinent to the filing, the Journal reported. For instance, the company amended the number of additional workstations added for the year from 273,000 to 106,000. The prospectus apparently also had to be adjusted when the gross income from those stations, stated initially at $1.3 billion, was changed to $800 million. Why? Apparently the numbers were just “wrong”, sources told the Journal.
The company’s prospectus failed to disclose the ownership of a $60 million Gulfstream G650ER (a private jet that is now for sale) and made no mention of Neuman’s sale of hundreds of millions in company stock since the company formed in 2010. Although not required by the SEC, failure to disclose stock sales by company executives doesn’t tend to sit well with prospective investors.
WeWork does still plan on going public, but the timing for that move is now in flux. With Neuman forced out, co-CEOs Artie Minson, formerly the company’s co-president and chief financial officer; and Sebastian Gunningham, who was vice-chairman, told The Washington Post that the company is going to focus on its “core business” for the time being.
“We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future,” the co-CEOs wrote in a statement.
Link: https://www.law.com/americanlawyer/2019/10/27/deal-watch-wework-drama-spins-off-work-to-multiple-big-firms/
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You Can't Manage It If You Don't Measure It
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