WeWork co-founder Adam Neumann has shelved plans to buy back the flexible workspace business he was ousted from in 2019.
In March, Neumann reportedly bid around $500m (£395m) to purchase the company, which was in Chapter 11 bankruptcy protection.
However, last month it emerged technology business Yardi Systems was poised to become the majority owner of WeWork after the flexible workspace company secured a new $450m financing facility.
Yardi agreed to provide WeWork with funding of $337m, with a further $112m coming from bondholders. Under the terms of the proposals, Yardi will acquire a 60% equity stake in WeWork, a group of lenders will get 20% and SoftBank will receive 20%.
WeWork received court approval to pursue the plans, which will conclude the company’s financial and operational restructuring and allow it to emerge from Chapter 11 by the end of this month, if creditors vote in favour of the plans at a meeting on 30 May.
In a statement, Neumann told the New York Times: “For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive. Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed.”
WeWork, which was once valued at $47bn, filed for Chapter 11 protection in November last year. In a trading update issued in April this year, the company said it had negotiated rental savings of more than $8bn and had “determined a final path forward” at 90% of the locations in its global real estate portfolio through amended leases, new management agreements or via the “lease rejection process”.
