Adam Neumann claims to have Wall Street backing in order to purchase WeWork from bankruptcy. He was fired after accruing billions of dollar losses.
Neumann’s lawyers sent a letter on Monday to WeWork saying that he had “partnered” with Daniel Loeb’s hedge fund Third Point. They also said they had tried to communicate with the company for months without success.
Third Point said that they had “only held preliminary conversations” with Flow (Neumann’s real estate company) and Adam Neumann regarding their plans for WeWork and have not committed to any transaction.
People familiar with the process say that executives from Third Point and Neumann held their last official meeting in October to discuss an upcoming bid for the company.
SoftBank didn’t immediately respond to an inquiry for comment.
Neumann was in charge of WeWork when its value peaked at $47bn on private markets, but then crashed after scrapped an initial public offering. Investors had expressed concerns over the business of WeWork and Neumann’s management.
Neumann’s potential supporters will face many challenges in any attempt to take over WeWork, as senior creditors were ready to seize control of the firm if it emerged from bankruptcy.
SoftBank has invested more than $16bn in WeWork and its affiliate businesses.
Neumann’s attorney Alex Spiro wrote in a letter that was reported first by the New York Times. He said that his client was disappointed by WeWork’s lack of involvement when the cofounder had asked to be included in the restructuring process.
Spiro wrote, “In an increasingly hybrid world of work where the demand for WeWork’s product is expected to be higher than ever before, my clients feel that the synergies offered and the management expertise provided by a purchase by my clients would significantly outweigh the debtor’s value on an individual basis.”
Neumann has spoken with WeWork’s creditors including King Street Capital Brigade Capital and BlackRock. However, it is unclear whether any of them are interested in his plan.
WeWork is also in a race against time as it struggles to get through bankruptcy. Lawyers for WeWork told a bankruptcy court that the company was out of cash, needed new financing and its attempts to restructure leasing were slow.
Neumann’s lawyer said that WeWork refusing to give it the proper information “had jeopardized the ability of the Company to. . . Maximise value for all stakeholders”.
SoftBank has paid Neumann handsomely over the years. In 2019, the co-founder signed a $185mn agreement to not compete with SoftBank. In 2021, he settled for $106mn over SoftBank’s decision to withdraw from a tender. In the end, his investment vehicle received $578mn in compensation for a portion of its equity stakes in WeWork.
WeWork stated that it had reviewed all expressions but felt “the work WeWork is currently doing — dealing with our unsustainable rental expenses and restructuring our company — will ensure WeWork’s best position”.
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