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Adam Neumann, who was kicked out of WeWork, now wants to buy back the bankrupt company: Report

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Adam Neumann, the charismatic yet controversial co-founder of WeWork, is looking for a dramatic comeback attempt to reclaim the office-sharing giant he was kicked out in 2019. 

According to a NYTimes report, Neumann, with the backing of hedge fund mogul Dan Loeb's Third Point and a $350 million investment from venture capital firm Andreessen Horowitz for his new real estate venture, Flow Global, is pushing to take over the now-bankrupt WeWork.

In a bold move, his lawyers have accused WeWork of "stonewalling" their attempts to engage in what they describe as a "value-maximizing transaction for all stakeholders."

WeWork's struggles

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After a failed IPO in 2019 due to investor concerns over its business model and governance, WeWork's fortunes have spiralled downward, culminating in a Chapter 11 bankruptcy filing in November.

The company, which was once valued at $47 billion, has faced increasing financial losses, member churn, and the need to cut back drastically on its real estate portfolio. 

Despite these challenges, The company received regular expressions of interest from potential buyers.

What was Neumann's proposal?

Neumann, alongside Flow Global, has shown interest in purchasing WeWork or its assets and providing bankruptcy financing to keep the company afloat.

The dramatic offer comes amidst WeWork's attempts to address its unsustainable rent expenses and restructure its business to survive independently. Neumann believes that the merger with Flow Global could significantly enhance WeWork's standalone value, particularly in a hybrid work world where demand for flexible office spaces is expected to grow.

Legal and financial hurdles

WeWork's advisors and stakeholders have shown resistance to Neumann's advances, raising concerns about the feasibility of selling the company back to its former CEO, whose leadership was once questioned.

The company's restructuring plan reveals over $4 billion in secured debt, with significant financial obligations to major creditors like SoftBank. This complex financial situation makes the outcome of Neumann's takeover bid uncertain, as WeWork explores its options to emerge from bankruptcy as a viable entity.

Following the bankruptcy filing, Several people raised concerns about the future of WeWork India. However, WeWork India asserted that this will not impact its India operation as it is backed by realty firm Embassy Group.

It's worth mentioning that Embassy Group holds a 73% stake in WeWork India, while WeWork Global has a 27% stake in the company.

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