Adam Neumann, the former co-founder of WeWork who was removed from his position, is considering a plan to repurchase the office sharing company following his disappointment with its bankruptcy proceedings.
According to a letter acquired by The Associated Press on Monday, a lawyer representing Neumann and Flow Global Holdings stated that the previous CEO of WeWork has joined forces with financial backers such as Dan Loeb’s Third Point and is prepared to present a thorough plan to acquire the company or its assets.
However, Third Point has not yet committed to making this purchase.
According to a statement released by the hedge fund, Third Point, they have had initial discussions with Flow and Adam Neumann regarding their proposals for WeWork. However, no decision has been made to take part in any potential transactions. The Financial Times was the first to receive this statement on Tuesday.
In November, WeWork declared Chapter 11 bankruptcy shortly after expressing concerns about its sustainability. The company cited higher member turnover, financial losses, and the need to reduce its real estate holdings as reasons for this decision.
As stated in the letter written by lawyer Alex Spiro on Monday, Neumann and his associates have been trying to acquire necessary information from WeWork for a potential purchase since December. However, the company has not been responsive and they still do not have the information they need.
The letter stated that these actions have put WeWork at risk of not being able to consider alternatives beyond its restructuring agreement. Additionally, it mentioned that these actions have also resulted in a failure to fully benefit all interested parties.
A spokesperson for WeWork, based in New York, stated on Tuesday that the company regularly receives interest from outside parties. WeWork reviews these inquiries and strives to act in the company’s best interests.
The representative stated that our efforts to tackle our unmanageable rent costs and restructure our company will secure WeWork’s position as a successful, independent, financially stable, and sustainable organization for years to come.
Lawyers representing WeWork have recently indicated a need for additional funds during the bankruptcy process. This includes the company withholding significant rent payments from specific landlords as they work to renegotiate lease agreements. Reports from The Wall Street Journal and others state that, during Monday’s court proceedings, attorneys for certain landlords argued that this action goes against bankruptcy regulations.
Neumann founded WeWork with Miguel McKelvey back in 2010. In its early years, the startup promised to revolutionize workspaces and saw a meteoric rise — once reaching a valuation as high as $47 billion — but over time, WeWork’s operating expenses soared and the company relied on repeated cash infusions from private investors.
In October of 2021, the company became publicly traded after a failed attempt two years prior resulted in a major failure. This incident ultimately resulted in the removal of Neumann, whose unpredictable actions and excessive expenditures caused concern among initial investors.
SoftBank, a Japanese company, intervened to rescue WeWork by gaining majority ownership of the company.
On Tuesday, The New York Times’ DealBook was the first to report on Neumann’s offer.