Adam Neumann, WeWork’s former CEO who was ousted as analysts expressed concerns about corporate governance, objected to WeWork’s proposed reorganization plan as he questioned its financial objections and called them “unsustainable.”

In his first personal correspondence with WeWork’s bankruptcy court, filed late Friday, Neumann said his investor group, known collectively under the name of his new real estate firm, Flow, has over the past several months tried to provide what he described as a “value-maximizing offer.” He said he offered to buy the company for $650 million in March as well as provide it with debtor-in-possession financing of up to $250 million, subject to due diligence.

His declaration came just days after his investor group first appealed to the bankruptcy court in its bid to buy back the company Neumann launched in 2010. The Flow group has said that WeWork has “rebuffed” its attempt — “often without any explanation — at every turn.”

WeWork recently said it’s in talks, and close to reaching an agreement, with its “consenting stakeholders.” It detailed in an amended reorganization plan also filed Friday $450 million in combined debtor-in-possession "new money" exit and interim financing it's lined up.

The global flexible workspace provider’s consenting stakeholders include Japanese investment giant SoftBank, a group including asset manager BlackRock, and a third-party investor going by the name of Cupar Grimmond.

In his filing, Neumann said WeWork’s reorganization plan calls for selling 80% of WeWork’s post-bankruptcy equity for $400 million to Cupar and possibly other consenting stakeholders, a price that reflects just $500 million of equity value.

Flow’s $650 million offer “vastly exceeds the value afforded by the sale contemplated by [WeWork’s] plan,” Neumann said.

WeWork’s restructuring plan and financial projections are “unsustainable in light of the razor-thin margin for error baked into the plan’s financial projections,” he said.

WeWork’s projections “predict a hockey-stick type of increase in occupancy percentage — anticipating a climb of historical occupancy from the mid-70% percentage to 85%,” he said, adding WeWork didn’t showcase in its filings how it would “expect to achieve such unprecedented levels.”

WeWork’s proposed plan “hinges upon overly optimistic financial revenue and cost projections that can’t be reconciled with [WeWork’s] historic performance,” Neumann said. “If these unrealistic projections fail to materialize, [WeWork is] likely to find [itself] undercapitalized and cash-flow negative in the not-too-distance future, which could result in a return of WeWork to Chapter 11.”

Neumann was removed as WeWork’s CEO in 2019 over corporate governance concerns when the money-losing company failed in its first attempt at going public with a valuation of $47 billion. That figure plunged to $9 billion when shares eventually started trading on the New York Stock Exchange in October 2021. WeWork filed for bankruptcy in early November after years of signing expensive leases at the cost of profit under Neumann.

In his filing Friday, Neumann said he had met with WeWork CEO David Tolley in December to express an interest in buying the company but was advised WeWork was “not for sale.” Tolley suggested Neumann make a debtor-in-possession financing proposal instead, Neumann said in the filing.

Debtor-in-possession financing is provided to companies in bankruptcy and often involves lenders charging high interest rates and fees while securing a priority claim over other creditors, bankruptcy lawyers have said.

Flow’s attorney, Alex Spiro, recently told CoStar News the firm “and its financial partners are prepared to offer 10% more than any other offer that WeWork has received with a timeline to complete diligence in just two weeks.”

Flow’s debtor-in-possession proposal “was well below the amount required to pay off [WeWork’s] nearly $4 billion in secured debt obligations,” James Baird, a partner at investment bank PJT Partners, a WeWork adviser, said in a filing Friday. Neumann’s proposal seeks to have priority claims over other secured lenders and would require approval from WeWork’s stakeholders, Baird said, adding those stakeholders would be “unwilling” to give their blessing. That means Flow’s proposal is not “actionable,” he said.

A WeWork spokesperson declined to comment on Neumann’s filing.

WeWork has said in a recent filing that it may need “a $400 million capital contribution” when it exits bankruptcy and said it has administrative claims, including rents it owes to landlords, of about $443 million.

The company’s cash balance had declined to $89.6 million at the end of February from $113.3 million at the start of the month as operating expenses in February alone were more than the revenue it generated.

Ciara Foster, an attorney for Kirkland & Ellis representing WeWork, said in a court hearing Tuesday that any path forward for WeWork would require it to work with SoftBank.

The Japanese investment firm “is critical to the deal,” Foster said.

SoftBank hasn’t responded to CoStar News’ requests to comment.

While WeWork, according to Neumman's Flow group, may have been less than lukewarm to its offers, WeWork’s official committee of unsecured creditors, which includes landlords, and a separate group of noteholders, have argued that WeWork should entertain or hear proposals from Flow.

WeWork should “be entertaining the third-party proposal,” Kristopher Hansen, a lawyer for law firm Paul Hastings that represents the committee of unsecured creditors, said in the court hearing last week.

The panel said in March it’s seeking bankruptcy court approval to sue SoftBank and related parties to help recover hundreds of millions of dollars for landlords and its other unsecured creditors.

WeWork projected in a filing recently that it will turn profitable next year after emerging from bankruptcy protection. The company has been renegotiating leases with landlords to cut its lease burden, the biggest challenge to WeWork becoming profitable.

The company has said revamping its real estate portfolio is expected to result in the "elimination of over $8 billion in total future rent commitments." WeWork said it’s expected to end this year with 335 locations, 297,319 members. and an occupancy rate of 76%. By the end of 2028, it expects the occupancy rate to rise to 85%.

A bankruptcy court hearing is scheduled Monday.

WeWork is a tenant in a Virginia building CoStar Group acquired earlier this year, making CoStar a creditor in the case.