Adam Neumann says WeWork lied about his $650M offer

Adam Neumann and WeWork are throwing allegations against each other as the former CEO presses on with his offer to buy the co-working firm out of bankruptcy. 

Neumann previously alleged that WeWork refused to enter into a non-disclosure agreement to go forward with negotiations. Neumann now claims WeWork is making false statements against him and his $650 million offer to buy the company in a new filing.

WeWork has been seeking to raise money from SoftBank and Yardi Systems to exit bankruptcy. On Friday, the firm filed its amended bankruptcy proposal, which said it reached a preliminary agreement to secure up to $450 million in exit financing.

But Neumann alleges that WeWork’s projections about its future occupancy are unrealistic. The company will find itself “undercapitalized and cash-flow negative in the not-too-distant future.” It could soon find itself in bankruptcy again, Neumann claims. 

Neumann was forced out of WeWork in 2019 after a disastrous initial public offering attempt. WeWork struggled with losses for years and filed for bankruptcy in 2022. Neumann’s started a new company Flow, focusing on residential apartments. He recently made a surprise bid to purchase WeWork out of bankruptcy.

According to Neumann, he met WeWork CEO David Tolley in December 2023 to discuss buying WeWork through his company Flow. Tolley told Neumann WeWork was “not for sale” and suggested Neumann make an offer for WeWork’s debtor-in-possession financing, which is a loan that allows bankrupt companies to fund operations. 

Neumann alleges Flow eventually sent an offer to provide $250 million in financing to WeWork. In an email, Neumann’s Flow also offered $650 million to acquire WeWork.

James Baird, an investment bank who worked on WeWork’s restructuring, claimed in an affidavit that WeWork’s board of directors found Flow’s DIP offer to be “value destructive.” He alleged that stakeholders would not sign off and Flow’s ability to finance the DIP proposal was uncertain. He alleges WeWork discussed the issues with Flow and possible remedies. 

Baird further alleged that the Flow’s DIP proposal was below the amount required to pay‑off WeWork’s nearly $4 billion in debt obligations. 

“I am not aware of a different proposal from the Flow Parties other than the Flow DIP Proposals discussed above,” said Baird.

But Neumann said this is false. Flow presented a real proposal to acquire the company, he alleged, attaching an email in the bankruptcy court showing that Flow made a $650 million offer to buy WeWork on March 11. The offer was submitted directly to Baird.

“Mr. Baird’s declaration that he is “not aware” of any other proposals from the Flow Group can only mean he never even bothered to review the Flow Group offer or he did not review his declaration before authorizing his name to be attached to it,” Neumann said in a filing. 

Neumann further alleges WeWork made false projections about its occupancy. The company expected occupancy to rise from the mid-70 percent range to 85 percent. WeWork never explained how it can reach those numbers, Neumann alleges.

WeWork said in a filing it is planning to exit bankruptcy next month. The company said it has locked in debtor in possession financing to fund its operations through bankruptcy and has reached agreements to amend leases at over 170 locations and will exit more than 160. 

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