Adam Neumann wants to buy WeWork out of bankruptcy despite being ousted and paid $445 MILLION golden parachute: Experts say struggling company could sell for just $500M
WeWork founder Adam Neumann is trying to buy back the company after it filed for bankruptcy in November.
Neumann’s new real estate company, Flow Global, has sought to buy WeWork or its assets, as well as provide bankruptcy financing to keep it afloat, the New York Times reported Tuesday.
Neumann has partnered with hedge funder Dan Loeb in his bid to take back the company, but accuses WeWork of stonewalling the bid, according to a legal letter published by the Times.
“We are writing to express our dismay at WeWork’s lack of involvement, even providing information to my clients, in what is intended to be a value-maximizing transaction for all stakeholders,” wrote Neumann’s attorney Alex Spiro, who also Elon Musk represents.
WeWork, once valued at as much as $47 billion on paper, ousted Neumann as CEO in 2019 amid sharp criticism of his leadership and “tequila-fueled” lifestyle.
Adam Neumann and his wife Rebekah live in South Florida
Key financial banker SoftBank initially offered Neumann a severance package worth $1.7 billion, but reneged on the deal and ended up paying him about $445 million in cash and stock, according to the Wall Street Journal.
News of Neumann’s bid comes a day after a lawyer for the shared office space provider said WeWork may be forced to take out a new bankruptcy loan to make up for slower-than-expected progress on lease negotiations.
WeWork’s post-bankruptcy business plan is based on a significant reduction in future rental costs from its landlords, and WeWork is at a crossroads in that effort, according to lawyers for WeWork and its landlords who spoke during a bankruptcy court hearing in Newark, New Jersey. .
Several of WeWork’s owners rejected the company’s “hardball tactics,” saying that U.S. bankruptcy law requires companies to keep track of rent for properties they continue to use.
Kris Hansen, a lawyer representing WeWork creditors, said WeWork has shown “painfully little progress” in its talks with landlords, raising doubts about the company’s long-term ability to pay its debts.
WeWork attorney Steven Serajeddini acknowledged that the company’s initial round of negotiations was headed for “certain failure,” but he said WeWork had more success after withholding as much as $33 million in January rent from certain landlords.
“The message was clear — you’re either with us or against us,” Serajeddini told U.S. Bankruptcy Judge John Sherwood, who is overseeing the company’s Chapter 11 filing.
“If your focus is on one month’s rent, instead of saving this company, you’re on the wrong side and your lease will be rejected.”
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