Adam Neumann Seeks To Buy WeWork, Partners With Hedge Fund Manager Daniel Loeb

WeWork co-founder Adam Neumann is reportedly trying to take back control of the coworking giant. 

Neumann's real estate company, Flow Global, and hedge fund manager Daniel Loeb have been pushing for months to buy WeWork out of bankruptcy, The New York Times reports, citing a letter Neumann's lawyers sent to WeWork on Monday. 

“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,” wrote the lawyers, led by Quinn Emanuel's Alex Spiro, according to the Times. 

Neumann’s attorneys said WeWork hasn't provided any of the information they have requested since December to facilitate either a purchase of the company outright or to provide it debtor-in-possession financing during the bankruptcy process. The letter says Neumann’s advisers, with financial backing from Loeb’s Third Point, had made a formal proposal for a $200M DIP facility.

Loeb is known for his activist investor commentary and is worth an estimated $3.3B. Third Point manages $12B in assets, according to Forbes.

“We receive expressions of interest from external parties on a regular basis,” a spokesperson for WeWork told Bisnow by email Tuesday morning.

“We and our advisors always review those approaches with a view to acting in the best interests of the company. 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.”

The letter says WeWork's advisers told the bankruptcy court Monday that the company needs additional financing and its negotiations with its landlords have “resulted in only seven successful lease amendments.” That is a stark contrast to WeWork’s comments in January that it has reworked 38 leases. 

WeWork said it has negotiated $1.5B in long-term savings through reduced rent, shortened leases, smaller footprints or early termination, The Wall Street Journal reported.

The company reportedly hasn't been paying rent to landlords who won't agree to discounts, some of which have pushed back, asking the U.S. Bankruptcy Court for the District of New Jersey to force WeWork to pay. They alleged WeWork owes $33M in back rent from January alone. 

Spiro hadn’t responded to Bisnow’s request for comment as of Tuesday morning.

On top of lease amendments, WeWork has been allowed by Judge John Sherwood, who is overseeing the company's restructuring, to back out of 80 leases. It filed to reject nine more one day after the landlords filed motions with the court to compel WeWork to pay January rent.

Neumann grew WeWork to a $47B valuation before stepping down in 2019 amid investor pressure after the company's failed initial public offering. WeWork later went public in 2021 through a special-purpose acquisition company, but continued financial challenges led it to file for Chapter 11 bankruptcy last year. 

Neumann, who received roughly $1.7B from major investor SoftBank to walk away from the company, later formed Flow Global. Flow first purchased Society Las Olas in Fort Lauderdale, Florida, with plans to renovate and reopen it sometime this year. The company owns five other buildings acquired by Neumann in 2021 in Atlanta, Miami and Nashville, totaling over $1B. 

Upon its founding in 2022, Flow was backed by Andreessen Horowitz, or A16z, a Silicon Valley venture capital firm that put $350M into the business, the largest single investment A16z had ever made.

The letter from Neumann's attorneys says his renewed interest in the company predates its bankruptcy filing in late 2023.

“Concerned with the state of the business and the outlook for the company, Mr. Neumann had previously worked to arrange up to $1B of financing to stabilize WeWork in October 2022, when just before the meeting [while participants were literally in the air traveling], the former CEO shut down that process without explanation,” the letter says.

Neumann has met with WeWork debtors and their advisers “on numerous occasions,” starting in December, according to the letter.