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Adam Neumann has abandoned his quest to buy back WeWork, the commercial real estate firm he founded and was booted from in 2019, according to a report.
Neumann told The New York Times DealBook that he will end his bid to reacquire the bankrupt coworking firm that he first embarked on in February as the company takes steps to emerge from bankruptcy.
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“For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive,” Neumann said in a statement to the newspaper. “Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.”
The Israeli entrepreneur founded the coworking company in 2010 and helped lead it to become a global brand, but stepped down in 2019 under pressure from advisors and investors in 2019 when his erratic behavior and out-of-control spending behavior were made public amid a failed attempt at an initial public offering by the company.
WeWork announced a plan to exit Chapter 9 bankruptcy in April which involves the property management software firm Yardi becoming a majority owner in a $337 million deal, with an additional $112 million coming from bondholders. If approved, the deal will allow Yardi to take a 60 percent ownership stake, while a group of lenders would get a 20 percent stake, and longtime WeWork backer SoftBank would get the remaining 20 percent. The plan was approved last month by a federal bankruptcy judge.
Neumann, who remained out of the public eye for a number of years after stepping down from WeWork, reemerged in early 2023 to launch Flow, which is billed as a rental housing startup with four pillars: an investment arm that buys buildings; a tech arm that manages them; a financial services arm that can collect rent and offer other, as-yet-unknown services; and the equity sharing arm.
In February, The New York Times reported that Neumann was making moves to regain his former company, which manifested in the form of a $500 million offer to the bankrupt company’s creditors to buy WeWork back.
But with WeWork’s bankruptcy exit plan approved by a federal judge, effectively wiping $4 billion in debt off the company’s books and enabling it to exit from Chapter 11 bankruptcy, Neumann’s offer no longer has a viable path forward.
WeWork, in the meantime, has been busy renegotiating its leases with its landlords as it looks to trim costs significantly amid an office market where hybrid work remains the norm.
