Adam Neumann, WeWork’s billionaire founder and ex-CEO, has reportedly been spending months trying to buy back the bankrupt co-working giant.
A team of lawyers led by Alex Spiro of Quinn Emanuel — who also represents Elon Musk and Jay-Z — penned a letter earlier reported on by The New York Times detailing Mr Neumann’s attempts to purchase his once-high-flying start-up via his new real estate company, Flow Global, the New York Post has reported.
The letter sent to WeWork’s advisers on Monday, said that Flow — which has already raised US$350 million (A$536 million) from the venture capital firm Andreessen Horowitz, per the NY Times — would get additional capital from hedge fund titan Dan Loeb to buy WeWork or its assets, as well as provide bankruptcy financing.
In the note, Flow’s counsel also accused WeWork’s advisers of a “lack of engagement even to provide information to my clients in what is intended to be a value-maximising transaction for all stakeholders”.
Mr Spiro said that Mr Neumann and affiliates of his latest venture have worked since December 2023 “to obtain information necessary for an offer to purchase the company or its assets,” though “they still do not have access to that information”.
The letter claims that this avoidance has “jeopardised” WeWork and “has failed to maximise value for all stakeholders — the goal of any bankruptcy process”.
In another example of WeWork’s stonewalling amid Mr Neumann’s years-long attempt to invest in the embattled firm, its CEO cancelled a scheduled meeting with Mr Neumann, where he was expected to share his plans for “a substantial equity infusion that would have helped the company,” Mr Spiro wrote.
Around that time, in October 2022, Mr Neumann, 44, — who was ousted as CEO in 2019 over reports about his outlandish behaviour — sought to arrange “up to US$1 billion (A$1.5 billion) in financing to stabilise WeWork”.
But the company’s then-chief, Sandeep Mathrani, “shut down that process without explanation,” according to the letter.
Mr Neumann’s attorneys also argue in the letter that Flow’s takeover of WeWork “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 maximising value,” Mr Spiro concludes.
Mr Spiro declined to comment further.
A WeWork spokesman told The New York Post that it receives “expressions of interest from external parties regularly”.
“We and our advisers always review those approaches with a view to acting in the best interests of the company,” the spokesman added.
Before Mr Neumann was kicked out of the firm after a string of controversies — including when he allegedly left a wad of marijuana stuffed in a cereal box on a borrowed private plane and abruptly announced that WeWork was banning meat at employee events — he was reportedly able to extract huge amounts of cash from his company before it stumbled into financial ruin.
Mr Neumann was also handed $US200 million ($A306 million) in cash as part of a sweetheart exit package, meaning the eccentric executive has been able to maintain his billionaire status despite WeWork’s Chapter 11 proceedings, which were initiated in November, when it had $US19 billion ($A12.5 billion) in liabilities and $US15 billion ($A9.8 billion) in assets.
Mr Neumann has since stayed under the radar building a new start-up, Flow — a starkly different narrative from WeWork’s peak, when it was valued at $US47 billion ($A71.9 billion) and a seemingly carefree Mr Neumann allegedly pounded champagne at events as early as 9am.
Ahead of Mr Spiro’s letter, there were rumblings as early as October — when Mr Neumann’s non-compete expired — that he could have a type of reunion with the company post-bankruptcy.
WeWork, which once operated 850 locations across 30-plus countries, now boasts just 630 locations on its website.
This article originally appeared on the New York Post and was reproduced with permission.