WeWork founder and chairman Adam Neumann wanted to see around a $ 200 million windfall as part of SoftBank's proposed deal to take over his troubled company, said a source familiar with the talks to Business Insider.
As part of the deal, Neumann would give up his seat on WeWork's board and his voting empire, the source said. Axios' Dan Primack previously reported the news, adding that one of the terms of the deal is that Neumann supports SoftBank's bid for the commercial real estate giant.
A WeWork representative declined to comment. Representatives from SoftBank did not immediately respond to a call for comment.
SoftBank was to submit a proposal to WeWorks Board on Monday. The board members of the cooperative are expected to meet Tuesday to review it, as well as a competing proposal expected from JPMorgan.
Both proposals will value WeWork at $ 8 billion or less ̵[ads1]1; far from the $ 47 billion valuation it received from SoftBank in a funding round in January. But WeWork was left behind after the planned public offering collapsed in the wake of massive opposition from potential investors. The company could reportedly run out of cash within a month without a new funding round.
Read this : WeWork will evaluate rescue proposals from SoftBank and JPMorgan on Tuesday
Neumann's financial condition remains uncertain
As large as the $ 200 million payout is, it is almost certainly a small fraction of what Neumann probably would have seen had WeWork's IPO gone through, given its significant stake in the company.
It is also unclear how the payment will affect Neumann's overall financial condition. According to WeWork's IPO papers, he had borrowed around $ 380 million from a collection of lenders, including JPMorgan, using WeWork shares as collateral. Recent reports have suggested that banks may be forced to send a margin call to Neumann; essentially requiring him to provide more security because of the fall in the value of his shares.
SoftBank's agreement to remove Neumann would complete its steep decline. When WeWork applied for its IPO, Neumann was the CEO and had majority control of the company with 20 votes per share. He was later forced to resign as CEO and agreed to reduce the votes to just three per share.
Neumann was the focus of much of the pushback from potential investors, and apparently also from SoftBank. He and his family members were involved in a series of transactions with the company that raised eyebrows, as did reports of him partying and using drugs.
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