Categories: Legal

WeWork’s Ex-CEO Sues SoftBank Over Aborted $3B Deal

WeWork Co-founder Adam Neumann has launched a legal battle with his company’s biggest investor, SoftBank Group Corp., charging that it has wrongfully reneged on a bailout deal.

Neumann, WeWork’s former CEO, would have been the big winner in the $3 billion deal, which included buying stock from shareholders and employees, notably him. Under the agreement, Neumann left the company’s board and was allowed to sell as much as $970 million in stock.

New York-based WeWork is a commercial real estate company that provides shared offices and services for tech startups and other companies. WeWork’s planned initial public offering (IPO) flopped last year.

Neumann accuses SoftBank and its Vision Fund of using legal pretexts to scuttle the $3 billion agreement as the conglomerate hit economic woes, according to a Bloomberg report. Rob Townsend, the chief legal officer at SoftBank, said Neumann’s lawsuit was “meritless.” “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer,” Townsend added.

Last month, WeWork itself sued Softbank over the same issues, as reported by PYMNTS. The complaint charged SoftBank with breach of contract and fiduciary duty to WeWork’s minority stockholders, including hundreds of its current and former employees.

“Instead of abiding by its contractual obligations, SoftBank, under increasing pressure from activist investors, has engaged in a purposeful campaign to avoid completion of the tender offer,” WeWork said at the time. “SoftBank first tried to thwart the roll-up of WeWork’s joint venture in China, and then claimed that the conditions to close the tender offer, one of which is the roll-up of WeWork’s joint venture in China, were not met.”

The lawsuit alleges that SoftBank has already received most of the benefits provided to it under the agreement, including control of the company. WeWork charged that other claims related to SoftBank’s reneging on the deal are “either disingenuous or irrelevant to SoftBank’s contractual and other obligations.”

Get our hottest stories delivered to your inbox.

Sign up for the PYMNTS.com Newsletter to get updates on top stories and viral hits.

——————————

New PYMNTS Study: Subscription Commerce Conversion Index – July 2020

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

Recent Posts

Intuit Inks Deal To Purchase Order Management Provider TradeGecko

Intuit, maker of QuickBooks, has inked a deal to purchase inventory and order management technology provider TradeGecko. The deal is…

2 mins ago

Booking.com To Trim Employee Roster By 25 Pct Globally

Booking Holding Inc., the Connecticut-based company that owns travel website Booking.com, plans to reduce its workforce by as many as…

20 mins ago

Grab Launches Microinvestment Solution, Consumer Loans, BNPL Plans

Grab Financial Group (GFG), a Southeast Asia financial technology (FinTech) and ridesharing company, is expanding its reach with the announcement on…

32 mins ago

The State Of Main Street In 2020’s Second Half

The first half of 2020 was a tough time to run a small business on Main Street as stay-at-home orders…

1 hour ago

Today In Payments: Amex Grows BNPL Options; Facebook Unveils Commerce Accelerator Plans

In today’s top news, American Express has unveiled a new payment option, and Facebook has revealed plans for a Commerce…

2 hours ago

Sweden Is Next On Amazon’s Expansion List

As eCommerce surges around the world amid the coronavirus, Amazon is looking to further expand its presence in the European…

2 hours ago