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Adam Neumann, the cofounder and ex-CEO of WeWork, has officially abandoned his very public attempt to repurchase the office-sharing giant.
Neumann, who resigned as CEO in 2019 amid controversy over WeWork’s failed IPO and scrutiny of its internal business practices, criticized the company’s new direction as he seemingly called it quits this week.
The development arrives ahead of WeWork’s May 30 court hearing, where it anticipates an approval of its updated bankruptcy exit plan. The deal, if approved, has Yardi Systems contributing $337 million through its affiliate Cupar Grimmond LLC. — which covers the majority of the coworking giant’s $450 million bankruptcy exit plan.
“For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive,” Neumann stated in a message to The New York Times’ DealBook newsletter. “Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.”
Neumann previously submitted a bid of over $500 million to regain control of the troubled flexible workspace provider through his new real estate venture Flow — backed by investment firm Anderson Horowitz.
WeWork recently posted in a blog post that it plans to assume 89 additional leases across North American markets including Chicago, San Francisco, Seattle, Vancouver, and Washington D.C. and that the expected assumptions “complete WeWork’s real estate portfolio review in most of its markets across the United States and Canada.”
Neumann’s departure in 2019 was precipitated by investor and board pressure after the company’s highly anticipated IPO collapsed due to concerns about its business model and corporate governance. WeWork had a peak valuation of $47 billion.
With Neumann backing out, all signs point to WeWork exiting chapter 11 bankruptcy at the end of the month, pending court approval. WeWork estimates that its updated portfolio will reduce total rent commitments by more than $11 billion, allowing the company to focus on improving operations in its most lucrative and sought-after locations in the coming months.
