The bankruptcy of the office platform WeWork could produce an unexpected winner: the once ousted founder, Adam Neumann. Before leaving his company at the end of 2019 after a failed IPO, the now 44-year-old negotiated extensive concessions for himself. Among them was a roughly $430 million loan from technology investor SoftBank, which is now coming under scrutiny.

Nevertheless, Neumann is not personally liable for this loan. Instead, the terms stipulate that if Neumann defaults on payment, SoftBank can claim his remaining shares in WeWork. However, the value of these shares has decreased from $500 million to $4 million since the fall of 2021. SoftBank is now concerned that Neumann may surrender the shares and forgo repaying the loan.

The entrepreneur, who was born in Israel, is said to have reduced some of his liabilities in 2022 but still owes several hundred million dollars to the technology investor. This poses another significant blow to SoftBank, which reported its fourth consecutive quarterly loss last week. Neumann, once valued at around $10 billion and last estimated at $1.7 billion according to the Bloomberg Billionaires Index, has not disclosed his intentions. In a statement, he emphasized that it is difficult for him to observe the decline of WeWork from the outside.

The platform, once valued at $47 billion, aggressively expanded over the years and was the largest single tenant of offices in London and New York. By 2019, doubts about the business model of leasing office spaces long-term and subletting them short-term began to surface among investors. After the planned IPO fell through, WeWork sought an alternative route to the stock market: in October 2021, the company debuted through a reverse merger with a shell company (SPAC) at a significantly reduced valuation in New York.

By that time, the demand for the office platform had already eroded due to the COVID-19 pandemic and the trend of working from home. WeWork was burning cash quarterly, regularly exceeding $500 million. The long-term lease obligations make up the most substantial part of the $18.65 billion debt that WeWork disclosed in its initial filing with the bankruptcy court in New Jersey. In contrast, the assets stand at $15.06 billion.

For years, WeWork attempted, with limited success, to alleviate the cost burden through renegotiations or terminations of lease agreements. With the bankruptcy, the company can unilaterally terminate lease agreements in the United States and Canada. The company plans to exercise this option for 50 to 100 agreements.

In addition to the potential winner Neumann, the bankruptcy of the platform brings forth a long list of losers: landlords losing income, tenants having to find new offices quickly, and shareholders who have already experienced massive losses in recent years.

The biggest loser by far is SoftBank. The conglomerate invested over $10 billion in WeWork during Neumann's tenure as CEO. Along with other investors, SoftBank paid over $1 billion to a company controlled and largely owned by Neumann. After the founder had to leave, SoftBank increased its stake and secured up to $5 billion in new loans for the office platform. In total, the conglomerate has lost over $14 billion of the approximately $16 billion it invested in WeWork.

Meanwhile, Neumann was generously compensated for his departure in 2019. At that time, SoftBank not only agreed to the now scrutinized loan but also made direct payments of $200 million to the entrepreneur. Additionally, the Japanese company stood in for $1.75 million, which the founder owed WeWork, that included expenses for the personal use of private jets. Neumann remains active in the real estate sector, using part of his income from his time at WeWork to purchase residential buildings. Last year, he launched his rental startup, Flow, supported by a $350 million investment from the venture firm Andreessen Horowitz.