Adam Neumann, the co-founder and former CEO of WeWork, has filed a lawsuit against the company’s biggest investor, SoftBank Group, and its Vision Fund for not completing a USD 3 billion tender offer to the company’s shareholders.
The tender offer was part of the USD 9.5 billion bailout program that SoftBank promised WeWork last year after the co-working startup shelved its IPO plans. The package also included a USD 1.5 billion injection from SoftBank and USD 5 billion in debt financing.
Neumann, who could sell up to USD 970 million in stock to SoftBank, was expected to be the biggest beneficiary of the transaction.
“The abuses committed by (SoftBank) and SBVF (SoftBank Vision Fund) are so brazen that they have prompted legal action by a special committee of WeWork’s board,” the lawsuit, which was filed on Monday in the Delaware Chancery Court, said, as quoted by Reuters.
In response, SoftBank’s chief legal officer, Rob Townsend, described the claims as “meritless.” “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer,” Townsend was quoted as saying in a statement.
A special committee of WeWork’s board also sued SoftBank for backing out of the tender offer, asking the Japanese conglomerate to complete the deal or pay compensatory damages.
SoftBank said in early April that it will not be moving forward with the tender offer, citing several unmet conditions and regulatory probes into the startup.