Hours before WeWork filed for Chapter 11 bankruptcy protection on Monday, the company's co-founder and former chief executive, Adam Neumann, weighed in on the expected move, expressing "disappointment."
"As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company’s anticipated bankruptcy filing is disappointing," Neumann said in a statement.
"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before," Neumann's statement continued. "I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully."
Neumann was CEO of WeWork from its founding in 2010 and oversaw the office-sharing company's rise to an estimated valuation of $47 billion in 2019, when it first tried to go public. But that effort was scrapped after investors balked at the firm's high levels of debt and massive losses.
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Later that year, Neumann was ousted after investors became disenchanted with his exorbitant spending and controversial behavior, but he was handed an enormous golden parachute to leave.
WeWork's major backer, Japanese conglomerate SoftBank, took control of the company with a bailout and offered Neumann a nearly $1.7 billion payout that left him with significant stock control.
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WeWork's new chairman following Neumann's departure, Marcelo Claure, defended the decision, saying, "There's a level of gratefulness that we're going to have for Adam because he's the one who built this business," and emphasizing the company would now face "zero risk" of bankruptcy. Claure left SoftBank in 2022.
SoftBank later sought to claw back its offer to Neumann, who then sued, resulting in the renegotiation of the deal that was ultimately settled to make way for WeWork's public debut.
The firm finally became a publicly traded company in 2021 via a special purpose acquisition company deal, but was never able to turn a profit.
Still, WeWork's current CEO, David Tolley, expressed optimism Monday that the company's bankruptcy will lead to the turnaround it needs.
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"Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet," Tolley said in a statement. "We defined a new category of working, and these steps will enable us to remain the global leader in flexible work."
