Billionaire WeWork cofounder Adam Neumann was forced out as CEO after the coworking startup’s failed IPO in 2019. But with WeWork now facing bankruptcy, he wants another shot, and is willing to buy out the entire company to get it.
Neumann and his $350 million real estate startup Flow have for months been trying to buy WeWork with financing from Dan Loeb, the founder of New York-based hedge fund Third Point, the New York Times DealBook reported, citing a letter sent from Flow to WeWork. The company has also proposed buying out WeWork’s assets or providing bankruptcy financing to keep it afloat, the Times reported.
But Neumann and WeWork’s messy breakup is still fresh in the minds of WeWork’s top brass, who are apparently less than enthusiastic about the former CEO taking over.
Flow’s letter to WeWork claims that the bankrupt coworking company has stonewalled Flow’s attempts to make a buyout offer, failing to provide needed information despite repeated requests and meetings since December.
“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders,” Flow’s lawyers wrote in the letter to WeWork.
Flow did not immediately respond to Fortune‘s request for comment.
WeWork was once valued at $47 billion, in part because of huge capital infusions made by SoftBank CEO Masayoshi Son, but it collapsed partly as a result of timing. The company entered into a number of long-term leases signed at the height of the office market just before the COVID pandemic led to a surge in remote work.
Neumann, however, was able to make out with a net worth of upwards of $2 billion (although his net worth fell to $1.7 billion in November), thanks to sweetheart leasing deals and payouts from WeWork along with shares in the company.
Since Neumann’s departure from WeWork, his upscale lifestyle and authoritative and unconventional management style have received a great deal of scrutiny in a documentary, a TV series and several books. In one of those books, Cult of We, two Wall Street Journal reporters detail some egregious examples even for the high-flying startup world. Neumann partied hard in private planes while other top executives flew coach, the book reported; he and a cofounder also trademarked the word “We,” and charged WeWork $5.9 million to use it in company branding.
Even after his ouster in 2019 following WeWork’s failed IPO, Neumann has continually taken an interest in the failing coworking company he helped start more than a decade ago. Neumann has said WeWork’s bankruptcy was “disappointing,” and said in a November statement that the company could do better.
“It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before,” he said in the statement.
The former WeWork CEO told Fortune in July that he had signed a non-compete and non-solicit agreement with the company but that it expired in October. As for his startup Flow, Neumann said its only options were to “compete or partner” with his former company.
A spokesperson for WeWork said in a statement to Fortune that Flow and Neumann’s offer is just one of many it receives from interested parties regularly.
“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 WeWork spokesperson said.
Third Point, meanwhile, distanced itself from Flow after the letter became public, telling Fortune in a statement that it has only had “preliminary conversations,” with Neumann and Flow about financing a WeWork buyout, and that it “has not made a commitment to participate in any transaction.”
Despite the bad blood between Neumann and WeWork, Flow’s lawyers said WeWork should consider the buyout offer for the sake of getting the most out of the company.
“WeWork should at least educate itself about that potential and not preclude itself from maximizing value,” the lawyers wrote.