Founder of WeWork grappling to save the organisation from bankruptcy
Adam Neumann, founder of WeWork, is trying to buy back the company despite being pushed out as CEO five years ago.
It’s often these points in a movie when people being rooting for the underdog, however, when Adam Neumann expressed interest in buying back WeWork after the organisation declared themselves as bankrupt in November 2023, it wasn’t met with the cheer he’d been looking for.
On Monday, 5th February 2024, lawyers representing Neumann’s new venture, Flow Global, sent a letter to WeWork advisors explaining that he has been trying to meet with the company for months to negotiate a fair deal to buy back the organisation.
In addition, the letter detailed that if Neumann wasn’t able to buy back the co-working space company, then he would alternatively offer debt financing.
However, it has been reported that WeWork advisors have been hesitant to revisit the negotiating table with Neumann, WeWork’s former CEO, as they claimed the establishment has had a ‘lack of engagement’ with him and had not provided the information needed to make an offer to purchase the company or finance its debt.
According to the New York Times, who were the first outlet to report on this matter, WeWork has more than $4bn in debt.
In the letter to WeWork, Neumann’s lawyers painted an overview of what the former CEO has in mind should he get the company back.
The letter said: ‘In a hybrid work world where demand for WeWork’s product should be greater than ever, my clients believe that the synergies and management expertise offered by an acquisition could significantly exceed the value of the debtors on a stand-alone basis. WeWork should at least educate itself about that potential and not preclude itself from maximizing value.’
In 2019, Neumann was pushed out of the company after WeWork failed to get on to the US stock market. The organisation was founded in 2010, and with Neumann as the major company stakeholder he was able to discuss an exit package worth almost half a billion – $245m was given in company stock and $200m in cash to leave the company.
Against this backdrop, since WeWork filed for Chapter 11 bankruptcy in November, as a result of rising interest rates amidst a lack of demand for office space, they have faced frustration from their landlords who have taken the company to court over doubts about its stability. This suggests the organisation may not have a choice but to strike a deal with Neumann. Only time will tell.
Image: Sargent Seal
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