WeWork founder Adam Neumann has petitioned a U.S. bankruptcy judge to facilitate his acquisition of the co-working company. Neumann asserts that WeWork’s management has refused to engage in discussions and intends to utilize the bankruptcy proceedings to approve a pre-arranged transaction with selected buyers. Neumann’s newly established real estate company, Flow Global, has proposed over $500 million to purchase WeWork out of bankruptcy. However, WeWork has not responded to their inquiries. Neumann contends that WeWork’s unwillingness to engage with Flow contradicts their legal responsibility under bankruptcy law to maximize value for stakeholders. The court will now decide whether to compel WeWork management to provide Flow Global with access to due diligence information. WeWork has indicated a willingness to consider proposals from external purchasers but has not commented on Neumann’s offer. WeWork filed for bankruptcy in November 2023, with a restructuring support agreement in place with its equity backer Softbank and its lenders. As part of the agreement, $3 billion in debt was forgiven in exchange for an equity stake in the business. WeWork’s attorney Ciara Foster stated in a court hearing on Tuesday that no other bidder had submitted a more lucrative offer than the proposed debt restructuring of $3 billion. In response, Neumann and Flow have not yet commented on how they intend to secure the support of WeWork’s lenders for their proposed acquisition. WeWork’s junior creditors, which include a court-appointed creditors committee and bondholders including Antara Capital, have expressed concerns that the company is rushing to have the restructuring approved before finalizing the agreement with its senior lenders. WeWork has recently addressed some of these concerns in court filings, providing more details about its future business strategy and claiming that it will save $8 billion in future rent costs as a result of negotiations with numerous landlords. Recent court filings also include a new valuation estimate for WeWork, placing the company’s worth at approximately $750 million. WeWork, which was once valued at $47 billion, expanded rapidly but incurred substantial losses before filing for bankruptcy protection. The company has struggled to achieve profitability due to the increased popularity of remote work following the pandemic, which has reduced demand for shared office spaces.
Adam Neumann Wants Judge to Aid His Takeover of WeWork
