In The Loop: The Legal Woes Of WeWork, Knotel, And Bar Works

Knotel is reportedly being sued by at least 4 landlords for lack of payments; the flexible workspace company owes around $1.6 million in unpaid rent.

WeWork Asks Judge to Dismiss SoftBank Suit 

Crain’s New York reported this week that “We Co., the parent of WeWork, asked a judge to dismiss a lawsuit brought by two of its board of members against SoftBank Group for reneging on a $3 billion offer to buy the coworking company’s closely held shares.” According to reports, directors of We Co. believe the company’s special committee “does not and should not have the authority” to pursue the litigation in the name of We Co.” This is a separate suit than the one filed in May by Adam Neumman against SoftBank “for scuttling the $3 billion tender offer.”

4 Landlords Sue Knotel for Lack of Rent Payments

The Real Deal reported this week that lawsuits are piling up against flexible workspace provider Knotel. According to the report, “since the beginning of July, at least 4 landlords have sued Knotel alleging the company owes a total of $1.6 million in unpaid rent.” As if that wasn’t bad enough, claims against the company have accelerated in the past week as Knotel has reportedly ceased paying rent at a number of its locations. Knotel has been harshly hit by the pandemic and the company is currently looking to return 20% of its portfolio to landlords. It is also seeking to raise $100 million in a funding round “that would significantly lower its valuation.”

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Bar Works Coworking Co-Founder Sentenced to Prison

In 2017, coworking space operator Bar Works, was accused of running a Ponzi Scheme operation. Early in 2018, Renwick Haddow, the alleged mastermind behind the fraud scheme, was arrested in Morocco. This week, several news sources reported that “the first prison sentence has been handed down in connection with the Bar works coworking Ponzi scheme, with more set to come later this year.” Savraj Gata-Aura, co-founder of Bar Works, was sentenced to 4 years in federal prison for his involvement in the scheme. According to reports, Gata-Aura was the responsible party for listing fictional CEO Jonathan Balck as the company’s head. 

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