As WeWork Value Plunges By $39B, Ex-CEO Adam Neumann Rakes In Another $1.7B
Herrick partner and chair of the Restructuring & Bankruptcy Group, Stephen Selbst, spoke to Forbes about outgoing WeWork CEO Adam Neumann’s $1.7 billion payout. He was quoted in this article outlining some of the hard questions that WeWork and its funders should be asking while facing a serious cash flow problem, suggesting that WeWork hold off on expanding further, and shed leases that are likely to remain cash-flow negative.
Selbst said, “I know from experience that troubled debtors often underestimate the extent of their cash flow problems. So the risk for any institution that funds WeWork now is that the money it provides” [is insufficient and it must make a later decision to provide more.] These kinds of situations are always fluid and there’s always risk that more bad news emerges with further diligence.”