By Clark Savage, Jr.
Did WeWork’s first investor short-change his lenders?
Brooklyn-based Hasidic Jew Joel Schreiber heads a company called Waterbridge Capital, whose properties include a diverse collection of buildings across the width of New York City, reportedly used his investment in WeWork to support loans equaling nearly $3.3 million. He later defaulted them, according to a pair of lawsuits that were filed last week.
“One plaintiff, Vikram Kuriyan, says that he provided Schreiber with five loans totalling $750,000 for real estate and business uses and is yet to receive payment for those loans. The complaint states that Kuriyan agreed to most of the loans with verbal “handshake” agreements, and continued to issue more loans to Schreiber even after he defaulted on earlier loans,” reported therealdeal.com.
“When Kuriyan made a fifth loan of $100,000 to Schreiber in 2016, Schreiber pledged to collateralize that loan and all the prior loans with Schreiber’s “unique” founding stock in WeWork, the complaint states. Schreiber has liquidated some of his WeWork stock, but never to repay his debt, according to the suit,” the web site added. As the transcript of the complaint notes, “Kuriyan considered Schreiber a friend who he believed he could be trusted to honor his word and keep his promises.”
True, Schreiber’s company, Waterbridge, has to its credit a string of major deals — the first Apple Store in Williamsburg, the purchase of One Court Square in Long Island City – but “if and when WeWork goes public, it could be the biggest windfall of his life,” noted Bisnow.com.
There is little question that the company is been far from running according to plan. As vanityfair.com recently reported, “WeWork’s downfall didn’t end with the ouster of co-founder Adam Neumann or the indefinite stall of its I.P.O. On the contrary, the hits have kept right on coming, both for Neumann and for the embattled company. According to Bloomberg, the start-up will run out of money next month without new financing—a stunning prospect for what was, less than a year ago, the highest-valued anticipated public offering in the country. (A WeWork representative didn’t immediately respond to Bloomberg’s request for comment.) WeWork will also shutter its New York City private school at the conclusion of the school year—a reflection of its tenuous financial position. And Neumann, who was forced out of the company last month, has now lost his billionaire status, just over six months after his worth was estimated at $4.1 billion.”
It was less than a year ago that WeWork opened its first Jerusalem location, but not without some controversy in the form of protests by ultra-Orthodox (Haredi) Jews. The issue: WeWork members’ ability to work at the facility on the Sabbath.