WeWork sues NY firm over botched development deal
Adam Neumann, ousted CEO of the office space firm, had initially pledged $500M
WeWork is suing a New York firm to recoup a $20 million fee it paid for a San Francisco development.
WeWork blamed Maximus, a firm led by Stellar Management alum Robert Rosania, for not not closing on WeWork’s proposed investment in the project and not returning an “exclusivity fee,” Crain’s reported.
The embattled co-working firm had envisioned putting a WeWork and WeLive on the 150-acre, 3,000-unit campus. Maximus was planning to increase the unit count to 7,000 — and Adam Neumann had agreed to pitch in $500 million.
But after WeWork’s spectacular fall from grace last year, which ended in a botched IPO, the exit of its CEO Adam Neumann and a proposed bailout package from parent SoftBank, the deal with Maximus fizzled. Now, WeWork is rapidly shedding assets, and selling some at a steep discount.