WeWork founder Adam Neumann wants to buy back reign after expressing concern over news of the company's bankruptcy.
In a letter obtained by The Associated Press on Monday, an attorney representing Neumann and Flow Global Holdings said that WeWork's former CEO had partnered up with capital sources like Dan Loeb's Third Point and "stands ready to submit a detailed proposal to purchase the Company or its assets."
WeWork filed for Chapter 11 bankruptcy in November 2023. The move came shortly after raising the alarm on the company's ability to stay in business while grappling with financial losses and mounting needs to cut back on its real estate portfolio.
According to Monday's letter, Neumann and his affiliates have been attempting to obtain information from WeWork necessary for a purchase offer since December but have been met with a "lack of engagement" from the company. They still do not have access.
As a result, these actions have compromised WeWork's capacity to explore options outside of its restructuring agreement and failed to maximize value for stakeholders.
In a statement sent to The Associated Press Tuesday, a WeWork spokesperson said the New York-based company receives "expressions of interest from external parties on a regular basis" and always reviews such approaches while aiming to act in WeWork's best interests.
"We continue to believe that the work we are currently doing - addressing our unsustainable rent expenses and restructuring our business - will ensure WeWork is best positioned as an independent, valuable, financially strong, and sustainable company long into the future," the spokesperson added.
Adam Neumann cofounded the company in 2010 before he was removed from the enterprise nine years later, as the company faced mounting investor concerns over its corporate governance and valuation amid its financial struggles.
Neumann and his startup, Flow, have continually shown interest in buying back WeWork since December 2023, said Neumann's attorney, Alex Spiro.
These efforts date back even further than December as Neumann had tried to arrange financing of up to $1 billion in October 2022 but was rejected by former CEO Sandeep Mathrani, said CNBC.
The proposed hedge fund, Dan Loeb's Third Point, told CNBC that it had not committed any financing and that discussions with Neumann were still in preliminary stages.
"Third Point has had only preliminary conversations with Flow and Adam Neumann about their ideas for WeWork and has not made a commitment to participate in any transaction," the hedge fund told CNBC.
"WeWork is an extraordinary company. As such, we receive expressions of interest from external parties on a regular basis. We and our advisors always review those approaches with a view to acting in the best interests of the company," a WeWork spokesperson told CNBC.
"We continue to believe that the work we are currently doing - addressing our unsustainable rent expenses and restructuring our business - will ensure WeWork is best positioned as an independent, valuable, financially strong, and sustainable company long into the future," the spokesperson added.
Why Does The Potential Buy Back Matter?
According to Axios, the transaction would serve as a mind-blowing boomerang, especially considering how many people still blame Neumann for the company's initial troubles.
It also might be WeWork's last and best hope of maintaining anything remotely close to its current footprint.
In a letter first obtained by The New York Times, Neumann and his company, Flow, have unsuccessfully sought to engage with WeWork, despite Flow's launch in 2022, where $350 million was secured from Andreessen Horowitz alongside a financial promise from Third Point hedge fund.
Neumann allegedly arranged up to $1 billion in financing for WeWork in the weeks before the November 2023 bankruptcy, but the company's then-CEO canceled their meeting without explanation.
