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It's a mix. Some locations they own, some they lease--including some that the CEO owns and they lease from him, which is an interesting arrangement.

> including some that the CEO owns and they lease from him

Did you see the part of the filing where, in case of death or incapacitation in the next ten years where the CEO is unable to fulfill his duties, a group of two board members _and_ his wife will select the next CEO, and if those named board members are also not available anymore then his wife will solely pick the two board members who will pick the next CEO with her, and if _she_ is unavailable then the estate of the CEO and his wife will pick the next CEO?

Page 198

I've never seen a company like this transfer to successive control via the private estate of the CEO in case of a vacancy. There's a lot of WTFs in here.

A school I attended once had a similar arrangement with one of its board members. I also vaguely recall that board member defrauding the school of several million dollars and being federally charged...

It's different for a school though because there are regulations on related party transactions for nonprofits.

Under "Properties Leased to The We Company," this is very interesting:

"As of June 30, 2019, future undiscounted minimum lease payments under these leases were approximately $236.6 million, which represents 0.5% of the Company’s total lease commitments as of June 30, 2019."

How is that going to fly with a public company?

Page 28 discusses it. They have an interesting approach to managing the conflict:

> Pursuant to our related party transactions policy, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our board of directors.

I was pretty impressed when I read "unanimous consent of our audit committee" but then it all went out the window when I saw or the majority of the Board. The company CEO/landlord is the person with the major conflict of interest. He also has the majority voting power of the company stock and will control the board. WeWork's attempt to mitigate this conflict of interest is nothing but smoke and mirrors.

That board position is the key problem. The conflict of interest isn't addressed at all.

As long as the lease rates are inline with the market rates, shouldn't be an issue.

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