In a push to wrestle back the company he co-founded, Adam Neumann on Monday sent a letter to the co-working giant pressing it to sell its assets to Flow, Neumann’s latest real estate endeavor.
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Adam Neumann, the founder and onetime CEO of WeWork, is attempting to buy back the now bankrupt commercial real estate company he was dramatically ousted from in 2019 as the limping company explores bankruptcy loan options to settle disputes with its landlords.
Neumann launched an effort two months ago to buy back the company with the help of the hedge fund manager Dan Loeb, according to details made public Tuesday in The New York Times. His push culminated in a letter sent to WeWork’s advisers on Monday by Neumann’s lawyers, pressing them to sell WeWork to Neumann’s latest venture, Flow, and advising them that Loeb’s investment services firm Third Point would help finance a transaction.
Flow is reportedly seeking to buy WeWork for its assets, and to provide bankruptcy financing to keep it from folding.
The letter also accuses WeWork’s advisors of stonewalling Neumann for several months and delaying a purchase they say would be beneficial to WeWorks’ shareholders.
“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders,” reads the letter written by attorney Alex Spiro, who also represents Elon Musk and Jay-Z.
Neumann’s takeover attempt is the latest twist in the 14-year saga of WeWork, which at its peak in 2019 was valued at $47 billion and was thought to represent the future of commercial real estate and workplaces in general.
Under Neumann’s leadership, the company attracted investment from some of the biggest names on Wall Street, most notably from Japanese bank SoftBank, which invested more than $10 billion in the startup and bailed it out in October 2019 when Neumann’s erratic management style, and WeWork’s enormous losses, were exposed, tanking a planned IPO and leaving the company scrambling for cash.
As the firm poured money into an aggressive expansion, opening offices in San Francisco, Los Angeles, Seattle, Tel Aviv, London and other major cities, their returns never matched their investments, especially once demand for office space began to drop off beginning in 2020.
The company declared bankruptcy in November 2023, leaving the door open for Neumann to begin his attempt to take back the company one month later.
Immediately after the company declared Chapter 11, Neumann said in a statement that WeWork could still succeed with the right team in charge and a reorganization of its corporate structure.
“It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before,” he sad. “I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”
He has also said that his new venture, Flow, would eventually “compete or partner” with his former company.
WeWork’s challenges have persisted after its bankruptcy declaration, mainly in the form of disputes with its landlords. The company’s post-bankruptcy path forward is centered around significantly lower corporate rents, leading to some of its landlords accusing it of “hardball” negotiation tactics according to Reuters.
The company has withheld up to $33 million in January rent from select landlords and is considering taking out further bankruptcy loans to get through its bankruptcy case.
The attempt to purchase WeWork is not the first time Neumann has involved himself with the company after his ouster. According to the letter from Spiro, in October 2022 he looked to arrange up to $1 billion in financing to help stabilize the teetering company, but the company’s then-CEO “shut down that process without explanation,” the lawyers wrote.
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