CO-WORKING giant WeWork is seeking fresh financing in order to finish negotiating rent cuts with landlords and exit bankruptcy, it revealed in a court filing.

The beleaguered company needs the funds mainly to pay rent on office spaces used by its customers, while it deliberates which buildings around the world to keep and which to shed as part of its Chapter 11 reorganisation.

WeWork said that its efforts “are at a critical juncture”, in a court filing that responds to complaints by a number of landlords.

More than a dozen landlords had asked a federal judge to force WeWork to pay rent they claim it is withholding in violation of bankruptcy rules.

WeWork has denied the allegation, arguing that the landlords could be paid using other means, such as letters of credit, rather than demanding funds from its shrinking pool of money.

The “vast majority” of the unpaid landlords have access to letters of credit and surety bonds set up to ensure they are paid, WeWork pointed out in its filing.

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The landlords could also be paid using traditional security deposits that renters typically put down when signing a lease, the company argued.

WeWork has been making progress in its landlord negotiations and most landlords have negotiated willingly, though the holdouts have refused to compromise, WeWork noted in the filing.

The company goes on to warn that “these requests for relief risk causing all parties to lose the forest for the trees”.

“We have a clear line of sight into a profitable, sustainable WeWork having reached numerous beneficial agreements with our landlord partners to date,” the company said. “Any new financing would serve to strengthen our ongoing operations throughout the bankruptcy process.”

Under bankruptcy rules, a company must keep paying rent while under court protection, unless it decides to cancel a lease. If a company cannot pay key bills – including rent, legal fees and employee wages – the firm cannot win court approval of its reorganisation plan. Such cases usually mean a firm is headed to a fire-sale type of liquidation.

Earlier this month, WeWork unveiled its proposed bankruptcy plan, which is built on a deal it struck with a majority of its secured creditors before filing for court protection in November.

Under the plan, senior lenders – including holders of WeWork’s credit line, first-lien notes and second-lien notes – are slated to own the company after it emerges from bankruptcy, court papers show. Meanwhile, third-lien noteholders and unsecured creditors are likely to be wiped out.

When it filed for bankruptcy last year, WeWork vowed to cut the number of properties it rents and reorganise its other debt in a bid to survive. BLOOMBERG