4 ms·

If the main lose is on the leases, isn't that where corporate lawyers involve or foresee that kind of situations? Are they still paying all of the lease during

If the main lose is on the leases, isn't that where corporate lawyers involve or foresee that kind of situations? Are they still paying all of the lease during pandemic?

M2Ys4U 6y ago
Victoria's Secret managed to put a "you must continue paying even if there's a pandemic" clause in a contract signed _in February_ so... it wouldn't surprise me if We Work still had to pay rent given how well (read: not well) the company is run.
- EwanToo 6y ago
  When the CEO owned some of the buildings they were leasing, I can imagine a scenario where the lawyers were told not to look too hard at the paperwork...
- exhilaration 6y ago
  Can you give us a link to a story about this? I'm curious to see how (some) companies planned for the economic downturn.
  - perl4ever 6y ago
    It was mentioned in Matt Levine's columns of the 23rd and 24th. Unfortunately, I assume those are behind Bloomberg's paywall. Here is a quote from L Brands courtesy of Levine: "Sycamore ignores a fundamental problem with its apparent case of buyer’s remorse: At the time the parties negotiated the Agreement, the world was already well aware of the existence of COVID-19, and the parties agreed that Sycamore would bear the risk of any adverse impacts stemming from such a pandemic. … Sycamore and its representatives may wish that the world did not have to face the pandemic that now confronts us, and may regret that they did not negotiate the allocation of pandemic risk differently in the Transaction Agreement. But having made that commercial choice, Sycamore must now live by it."
rndgermandude 6y ago
The landlords have lawyers too. A landlord would not go for a rental contract that places the risk of something like a pandemic solely on their own shoulders. Those landlords more often than not financed the property (development, property costs, construction) with long term loans themselves, so they have to repay that with interest in top of what the taxman wants, payroll, etc.

If the main lose is on the leases, isn't that where corporate lawyers involve or foresee that kind of situations? Are they still paying all of the lease during pandemic?

M2Ys4U 6y ago

Victoria's Secret managed to put a "you must continue paying even if there's a pandemic" clause in a contract signed _in February_ so... it wouldn't surprise me if We Work still had to pay rent given how well (read: not well) the company is run.

EwanToo 6y ago
When the CEO owned some of the buildings they were leasing, I can imagine a scenario where the lawyers were told not to look too hard at the paperwork...
exhilaration 6y ago
Can you give us a link to a story about this? I'm curious to see how (some) companies planned for the economic downturn.
- perl4ever 6y ago
  It was mentioned in Matt Levine's columns of the 23rd and 24th. Unfortunately, I assume those are behind Bloomberg's paywall. Here is a quote from L Brands courtesy of Levine: "Sycamore ignores a fundamental problem with its apparent case of buyer’s remorse: At the time the parties negotiated the Agreement, the world was already well aware of the existence of COVID-19, and the parties agreed that Sycamore would bear the risk of any adverse impacts stemming from such a pandemic. … Sycamore and its representatives may wish that the world did not have to face the pandemic that now confronts us, and may regret that they did not negotiate the allocation of pandemic risk differently in the Transaction Agreement. But having made that commercial choice, Sycamore must now live by it."

rndgermandude 6y ago

The landlords have lawyers too. A landlord would not go for a rental contract that places the risk of something like a pandemic solely on their own shoulders. Those landlords more often than not financed the property (development, property costs, construction) with long term loans themselves, so they have to repay that with interest in top of what the taxman wants, payroll, etc.