Poof! Adam Neumann’s $185M WeWork gig disappears
Chairman says co-founder may have violated the agreement
Adam Neumann’s controversial $185 million WeWork consulting deal is no more, according to Marcelo Claure, the company’s executive chairman.
“I don’t think that consulting agreement is still in force,” Claure said at The Wall Street Journal’s Tech Live conference Monday, according to the Journal. “I think Adam may have violated some of the parts of the consulting agreement, so that’s no longer in effect.”
The deal was part of the WeWork founder’s generous exit package from the co-working company, which called for SoftBank to buy about $1 billion of stock from Neumann, refinance a $500 million debt, and pay a $185 million consulting fee. The deal is now being disputed as SoftBank and WeWork try to stem their losses.
Claure did not explain how Neumann violated the consulting agreement, citing pending litigation. Claure added that Neumann was “incredibly helpful at the beginning” in aiding SoftBank to understand WeWork, according to the Journal.
Part of the consulting deal prevented Neumann from competing with WeWork for four years, the Journal reported.
Bloomberg reported that the payment depended on a deal by which SoftBank would acquire WeWork stock from Neumann and other shareholders. That agreement is now the subject of a lawsuit.
Neumann left WeWork last year after the company’s IPO failed to happen. Bloomberg reported that Neumann recently invested $30 million in Alfred Club, Inc., a startup that provides services — such as dog-walking, maintenance requests and rent-processing — in apartment buildings. It was his first venture since leaving WeWork.
Claure said WeWork looks to be profitable in 2021. He said the company only needs to exceed 67 percent to 68 percent in occupancy to be profitable.