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Japanese conglomerate dismisses ‘meritless claims’
Adam Neumann, the now-departed co-founder and CEO of WeWork, has sued Softbank. He accuses the Japanese conglomerate of abusing its power to withdraw from a multi-billion dollar agreement.
The lawsuit filed by Neumann states: “Mr Neumann put his trust in [SoftBank] to be stewards of WeWork, which he – and thousands of others – had worked so hard to build.” Neumann asserted that he “upheld [his] end of the bargain” while the Japanese group did not.
Through its Saudi-backed Vision fund, SoftBank had helped WeWork become one of the most highly valued start-ups in the world. However, after genuine investor interest proved lacklustre when the company tried to IPO last year, this valuation plunged from $47bn to $10bn.
The idiosyncratic Neumann proved to be a divisive figure and, when SoftBank stepped in with a rescue package which included a $3bn (£2.4bn, €2.7bn) share buyout deal, he departed with the possibility to eventually sell around $900m in stock.
Last month, citing “multiple, new and significant” pressing criminal investigations by authorities into WeWork’s communication with investors and financing activities, SoftBank reneged on its proposed deal.
Neumann now alleges that within two months of his departure, SoftBank “was secretly taking actions to undermine” the agreement. This pressure included an attempt to alter the sequence of investments agreed in the original deal and the application of pressure on investors in WeWork’s two joint ventures in Asia.
The former wunderkind protege of SoftBank’s boss Masayoshi Son, now hopes to consolidate his lawsuit with one filed last month by WeWork’s special committee, which accused the Japanese investment giant of engaging “in a purposeful campaign to avoid completion”.
Responding to this latest development, SoftBank’s chief legal officer, Rob Townsend, stated that the company: “will vigorously defend itself against these meritless claims“. He added: “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr Neumann – the biggest beneficiary – sought to sell nearly $1bn in stock.”
