December 9, 2023

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The WeWork founder has a huge advantage post-bankruptcy: He’s still a billionaire

The WeWork founder has a huge advantage post-bankruptcy: He’s still a billionaire

Adam Neumann founded WeWork. Despite its recent bankruptcy, its founder still maintains a fortune of $1 billion

Although WeWork’s management throughout its history has proven not to be the most efficient, the same cannot be said about its founder Adam Neumann’s finances. Despite the company he founded’s million-dollar losses, which led to its bankruptcy, he is still among a select group of people whose fortune is more than a billion dollars.

The millionaire founder of Big Promise Co-working was forced to resign and leave the company’s board of directors after suspicious movements of funds to cover his high standard of living.

WeWork falls from the sidelines. After months of suffering and financial problems, which were a harbinger of doom, WeWork finally declared bankruptcy, leaving behind huge debts. That doesn’t seem to matter to the billionaire founder since it’s investors Softbank Group and Vision Fund who will assume a significant portion of WeWork’s $11.5 billion in debt.

“It was a challenge for me to watch from the sidelines as WeWork failed to capitalize on a product that is more important today than ever before,” Neumann said. Upon hearing the news of bankruptcy For the company he established in 2010.

Adam Newman and the “circular economy”. His departure from the company in 2019 had several reasons, but the main reason was the unfair management of its founder, who bought office buildings in his name, then leased them to WeWork and kept the property, WeWork interests, and the rent. , exactly like The investigation revealed to The Wall Street Journal.

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It is estimated that Adam Neumann made millions of dollars from buying buildings for which his company paid an average of $110 million per year while he was its CEO. What comes out of one pocket goes into the other double.

Leaving WeWork was the best deal of his life. After WeWork’s disastrous first attempt to go public, investors raised doubts about the company’s direction, suspecting that Neumann was spending millions of dollars on personal expenses at the company and racking up corporate credit card debt. This pressure He was forced to resign from his position To head the company and sell his private plane worth $60 million.

However, the founder’s departure was not empty-handed. according to general Bloomberg, Neumann received $185 million for a non-compete agreement, $106 million for the settlement payment, and $578 million for his shares sold to SoftBank in the initial public offering. In addition, the manager received a credit extension worth another $432 million from SoftBank. In total, Neumann’s fortune rose to $2.3 billion after leaving WeWork.

New life, old job. Flow is the new residential real estate venture by Adam Newman, who recently launched Received an investment of $350 millionIts value is already estimated at $1 billion.

A portion of the real estate in the Flow package was already owned by its founder, so it repeats WeWork’s pattern of conflicts of interest in investments. According to Newman’s statements In an interview “Flow is another repetition of the same story [de WeWork]Which is: When people live in a society, when people live together, they obviously have differences. But there is common ground.”

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Affected by bankruptcy, but by a margin. After his passing, Adam Neumann still held a percentage of WeWork shares, so part of the “pain of seeing the company he founded collapse” comes from the loss of value it means this fall.

However, luck Appreciation Since Adam Neumann owns some of the buildings he leased to WeWork, the founder still retains a fortune of about $1.7 billion.

In Chataka | WeWork declares bankruptcy. Icarus the work that wanted to touch the sun and ended up burning his wings

Image | TechCrunch