Happy Sunday, and welcome back to Dry Powder.

There’s a surreal poetry to Adam Neumann’s apparent efforts to pluck his old baby, WeWork, out of bankruptcy—a company he exited, of course, with a nearly billion-dollar pay package while it torched tens of billions of investors’ money. In today’s issue, a close look at whether this is all yet another P.R. stunt, what to make of the notable absence (so far) of his most ardent backer, and updates on his latest quixotic endeavor.

This absence, or at least this public absence, is the foremost of many, many mounting curiosities around this proposed deal. Andreessen, of course, is Neumann’s biggest backer, publicly and privately. His venture behemoth, Andreessen Horowitz, a.k.a. a16z, wrote a $350 million check to Neumann, the largest in the firm’s history, for a stake in Flow Global Holdings LLC, his ambiguous, quasi-REIT, post-WeWork enterprise. On the surface, Flow is a collection of 4,000 apartments in cities such as Miami, Fort Lauderdale, Nashville, and Atlanta. But with this inventory, Neumann is hoping to transform rental housing by (inexplicably) giving tenants equity in Flow in exchange for slightly elevated monthly payments, thereby making the experience more community-oriented and somehow meaningful.

According to a recent newsletter sent around to tenants at one Flow property—Society Las Olas, in Fort Lauderdale—there was a “pop-up event” on the “Yoga Lawn” to watch the AFC East division game between the Dolphins and the Bills. “Drinks and snacks will be served to early attendees,” the note advised. Other upcoming social events included a first meeting of a book club to discuss The Alchemist; a speaker, neuroscientist Emily McDonald; and, a poker night. You get it, faithful readers: run-of-the-mill Florida condo association shit.

Reading the promotional material, you can almost hear Neumann’s swarthy baritone doing the voiceover. There was also a “special offering” for a 12-week, exclusive online program with Stephanie Peters, a financial coach, where Society Las Olas residents could “discover your financial potential in 2024.” A friend who is renting a fully furnished apartment at Las Olas, from an intermediary, wrote to tell me “this building is extremely young. It may be too young for me. The apartments are small. … The young people in the building are very nice. The young men hold the door open for me.”

Andreessen, however, isn’t simply investing a historic amount of a16z’s money. He personally romanced Neumann and Flow. In early 2020, a few months after Neumann wrecked WeWork beyond the capacity of the public markets to handle (but still left with his billion-dollar settlement), Andreessen cold-called Neumann. “I know we don’t know each other,” Andreessen said to Neumann, according to a conversation the two men had in Washington that a16z released publicly a year ago. “But let me tell you something about venture capital in high-growth companies: The bigger the venture, the bigger the growth. What I’m about to tell you is more true: it’s hand-to-hand combat. Anybody who doesn’t know that venture is hand-to-hand combat doesn’t actually understand it or has never done it before.”

Andreessen then continued with his hyperbolic metaphor. “And when you fight, once in a while you get punched. … I guarantee you that for every mistake you made, there’s a hundred things that you did right. And I just want you to know that it’s part of the game to get punched. And the question is not, ‘Are you going to get back in the game?’ The question is: When? And just so you know, you have a friend here that you’ve never met before, but we’ve been tracking you and if you ever decide to do anything, then call us.”

On one such call, in March 2020, Andreessen offered to invest in Flow. And then, in August 2022, a16z put up the $350 million, at a valuation in excess of $1 billion. Andreessen was officially all-in on the post-WeWork Adam Neumann. “Adam is a visionary leader who revolutionized the second largest asset class in the world—commercial real estate—by bringing community and brand to an industry in which neither existed before,” Andreessen wrote in a blog post, without mentioning the billions lost by the original investors in WeWork. “Adam, and the story of WeWork, have been exhaustively chronicled, analyzed and fictionalized—sometimes accurately. For all the energy put into covering the story, it’s often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann.”

So why isn’t Andreessen part of the effort to back Neumann, the “visionary leader” who “revolutionized” the commercial real estate business, in trying to buy WeWork out of bankruptcy? I don’t know, and a16z isn’t talking to me; its communications director, Kim Milosevich, did not respond to my request for comment. But his absence is only one of the many oddities here.

But according to Spiro, WeWork did not produce the financial information that Neumann was seeking. Spiro also revealed that Neumann had met with WeWork’s financial advisers at Paul Taubman’s firm, PJT Partners, “on numerous occasions” and repeatedly expressed interest in buying WeWork or providing D.I.P. financing. “Initially, [WeWork] resisted my clients’ overtures,” Spiro wrote, “saying that it would create an adverse dynamic for negotiations with landlords,” only seven of which, Spiro wrote, had negotiated successful lease amendments with the debtors.

In December, Spiro continued, the suggestion was made that Neumann and his investors provide D.I.P. financing instead of trying to buy the company. That’s when Neumann and his team provided WeWork with a $200 million D.I.P. facility proposal and signed an N.D.A., but still did not receive the financial information they sought. (You would think that Neumann must have had enough financial information to serve up a $200 million loan.) In the end, Spiro wrote, Neumann and his investors “stand ready” to provide a detailed proposal to buy WeWork out of bankruptcy. Without the slightest hint of irony, Spiro concluded on behalf of his client, who once torched WeWork’s $47 billion valuation: “In a hybrid world where demand for WeWork’s product should be greater than ever, my clients believe that the synergies and management expertise offered by an acquisition by my clients could significantly exceed the value of the [d]ebtors on a stand-alone basis.”

In reality, if Neumann wanted to actually buy WeWork, there are many credible ways he could have gone about it besides an inadequate D.I.P. loan proposal and a letter from a publicity-seeking lawyer. First, he could buy, likely at a meaningful discount, a controlling position in whatever debt security, or securities, will end up with the bulk of the reorganized equity, presumably claims currently held by WeWork’s creditors, including Goldman, JPMorgan Chase, or Softbank, or others such as BlackRock, King Street, Brigade Capital, etcetera. (The debtors are hoping to eliminate the $4.2 billion of debt on WeWork by converting it to equity.) If Neumann wanted to buy the majority of fulcrum security here—presumably somewhere in the region of the 1L Notes and 2L Notes—he could convert the claims to equity as part of the plan of reorganization and, presto, own WeWork again.

On February 4, one day before Spiro wrote his letter to Kirkland, WeWork filed both a proposed plan of reorganization and a disclosure statement, as it had the exclusive right to do. In the plan, the company proposed canceling the $4.2 billion of debt and converting it into equity. (If Neumann owned the debt, or a big chunk of it, he’d already be in a position to own the majority of the reorganized WeWork. The disclosure statement provides a nice table of the breakdown of all the debt facilities.) A plan of reorganization in bankruptcy court is really just a for-sale sign on a company. And the disclosure statement in the WeWork case makes that abundantly clear. There it is, right there on page 111 of the 154-page disclosure statement, filed a day before Spiro sent his letter to Kirkland (and Andrew Ross Sorkin at The New York Times.) “Other parties in interest could seek authority from the Bankruptcy Court to propose an alternative plan of reorganization to the Plan,” the debtors wrote in the disclosure statement.

Under the Bankruptcy code, as any restructuring lawyer and banker knows, Neumann has a wide open playing field to try to buy the company. He could make an offer after the debtors’ four-month period of exclusivity ended, or petition the court to try to end the debtors’ exclusivity period sooner, among other tactics. If Neumann really wanted to acquire WeWork and merge it with Flow, Andreessen could have been profoundly beneficial, beyond just his invested capital. He could have explained to WeWork’s creditors why a16z backed Flow with its biggest-ever check, and how the combination with Flow and WeWork would work, and why his firm is supporting the combination with its capital and its reputation. Instead, silence.

As crazy as it is, even though he wrecked the company, Neumann can get his company back. All he has to do is make the creditors a better deal than the one soon-to-be-found in the debtors’ public filings. And he’ll probably be able to do that once the debtors’ exclusivity period ends, sometime next month, unless the exclusivity period for the debtors is extended. (I tried to get someone on the inside of the WeWork bankruptcy—an attorney at Kirkland, representing the debtors, and an attorney at Paul Hastings, representing the official committee of unsecured creditors— to discuss these machinations with me—but neither man responded to my emails.)

Neumann can also go the route taken by the late billionaire Sam Zell—who was known on Wall Street as “the grave dancer”—when he bought Revco Drug Stores out of bankruptcy some 30 years ago. I worked on the Revco bankruptcy when I was at Lazard. We represented the debtor in that case, then one of the biggest bankruptcy filings ever. We proposed a plan of reorganization that valued the reorganized equity of Revco at $7.47 a share, in stock. Zell, ever crafty, wanted to buy the company. All he did was offer the creditors $7.47 in cash for their stock in Revco, in effect giving them cash immediately at the reorganized value instead of waiting around to see if the stock actually achieved the value that we believed it would at some point. He didn’t even offer a premium. To the aggrieved creditors, cash today is infinitely better than stock tomorrow.

A whole bunch of Revco creditors took the deal Zell was offering. I think he ended up owning more than 40 percent of Revco after effectively underwriting the $7.47 stock price with cash. Zell made a fortune owning Revco and looked like the genius that he was. Neumann could do the same thing, if he was properly advised and as smart as he thinks he is—and, in the process, prove that he is more than just one of the greatest bullshit artists of all time.