Adam Neumann continues to court WeWork (WE), which is scrambling to find the money to hoist itself out of bankruptcy — likelly without the help of its founder-in-exile.
Neumann has renewed his offer to buy the company back. Meanwhile, the coworking firm is looking for as much as $400 million that will help clear itself of the Chapter 11 bankruptcy status without Neumann’s help.
WeWork will need at least that much to avoid selling the company after renegotiating hundreds of leases through court proceedings over the last few months. Neumann’s new venture, Flow, has offered between $600 million and $900 million.
“We are committed to emerging from Chapter 11 next month as a strong and sustainable company, and that is where our undivided attention lies,” a WeWork spokesperson said in a statement. “Any new financial investment would serve to further strengthen the company as we exit from bankruptcy.”
While WeWork remained circumspect about whether it was entertaining offers, Neumann’s camp believes the coworking firm has another offer in the pipeline, but on the down-low. Either way, Flow is willing to outbid any other buyer.
“Flow and its financial partners are prepared to offer 10 percent more than any other offer that WeWork has received with a timeline to complete diligence in just two weeks. But WeWork won’t even finalize a [non-disclosure agreement],” Alex Spiro, attorney for Flow, said in a statement. “WeWork is seeking to rush an insider deal with a current technology and billing provider who many landlords feel is uniquely conflicted based on its insider information about WeWork’s ongoing performance, and also extensive private information about other landlords nationwide.”
Neumann was removed from his role as chief executive officer of WeWork after a failed initial public offering in 2019.The company has since grappled with financial woes related to an unsustainable rate of growth during Neumann’s time at the helm, largely thanks to his aggressive expansion model that left WeWork on the hook for hundreds of leases across the world.
WeWork is confident that it can exit bankruptcy by May 31 after successfully renegotiating or exiting 90 percent of its leases and despite a loss of $122 million in the month of March.
Mark Hallum can be reached at mhallum@commercialobserver.com.
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
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