Adam Neumann, WeWork’s Former Chief, Sues SoftBank

Adam Neumann, a co-founder of WeWork, sued SoftBank on Monday, accusing it of breaching a contract by withdrawing an offer to buy up to $3 billion in WeWork stock from Mr. Neumann and other shareholders.

SoftBank, which gained effective control of WeWork in the rescue, previously said it walked away from the stock-purchase offer because certain provisions of the deal had not been met. But Mr. Neumann’s lawsuit asserts that SoftBank “was secretly taking actions to undermine” the deal.

Robert Townsend, SoftBank’s chief legal officer, said in a statement that the company “will vigorously defend itself against these meritless claims.”

Under the takeover agreement, Mr. Neumann stood to receive cash payments totaling $185 million and would have sold nearly $1 billion of his WeWork shares to SoftBank. SoftBank also gave him a $425 million loan to repay credit lines with banks that had been secured by WeWork stock.

SoftBank committed to invest and loan billions more dollars in WeWork as part of the rescue, but it is not clear how much of that money the company has received. The coronavirus pandemic has taken a big toll on WeWork, because the company’s business model requires it to pack workers into its shared office spaces. Most white-collar workers in big cities around the world have been working from home for several weeks, leaving WeWork’s offices largely empty.

Source Article