- An internal committee at Wells Fargo (WFC -0.7%) initially rejected lending $100M to WeWork (WE) in 2017 on concerns about the company's prospect and founder Adam Neumann's style.
- But the WFC bankers agreed to the loan after WeWork set aside cash as collateral and after the head of the bank's Eastdil real-estate unit said he'd keep a close eye on Neumann, the Wall Street Journal reports, citing people familiar with the matter.
- Banks, including JPMorgan Chase (JPM -0.4%) and Goldman Sachs Group (GS -0.8%), had significant doubts about We Co., WeWork's parent, even as they pitched its stock to potential investors, according to interviews and documents reviewed by the WSJ.
- Because of concerns about WeWork's unproven business model and Neumann's unpredictable behavior, JPMorgan, Goldman, and other banks negotiated big fees and strict protections such as requiring We to set aside cash as collateral.
- Still, both JPMorgan and Goldman had pitched multi-billion loan packages to We before it's failed initial public offering as they vied for top roles in the IPO that would have fetched hefty fees.