Adam Neumann has ended his bid to re-acquire WeWork as the coworking business he co-founded has chosen to emerge from bankruptcy with an “unrealistic” plan, he told the New York Times Dealbook on Tuesday.
Earlier this year, Neumann’s new real estate venture, Flow Global, had submitted a bid of more than $500 million to take over WeWork and its assets, Reuters has reported.
“For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive,” Neumann said in his statement to DealBook.
“Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.”
Neumann did not immediately respond to a Reuters request for comment, while WeWork, once privately valued at $47 billion, declined to provide a statement.
Neumann has previously said WeWork has refused to engage in talks, instead seeking to use its bankruptcy court case to “rubber-stamp” a deal that would turn over control of the company to “hand-picked buyers.”
Founded in 2010, WeWork aimed to revolutionize the office market by leasing large properties on longer leases and then renting them to multiple smaller businesses seeking flexible workspaces for shorter arrangements.
Initially viewed as a disruptor, with a business model unhindered by property ownership, WeWork expanded rapidly, but the company’s cash burn meant it could not keep up with debt payments.
With over $13 billion in long-term leases, it filed for Chapter 11 bankruptcy protection in 2023 to renegotiate these agreements.
Neumann was ousted in 2019 following a failed attempt to take the company public amidst growing investor concerns about losses and his leadership.
WeWork has been on a spree to rationalize its real estate portfolio to cut down on rent obligations.
Last week, it said it has determined a path forward at over 97% of its wholly-owned lease portfolio and expects to reduce total rent commitments by over $11 billion.
Source: Reuters.com