WeWork co-founder and former CEO Adam Neumann doesn’t believe SoftBank scrapped plans for a $3 billion buyout of the co-working giant because of the coronavirus fallout.
In a lawsuit filed Monday in Delaware, Neumann says Softbank chief Masa Son had been working to undermine that deal long before the pandemic took hold, according to the Financial Times. He accuses his former backer of abusing its power and “secretly taking actions to undermine” the share tender agreement, part of a bailout package that also included a $5 billion debt facility and acceleration of an earlier $1.5 billion commitment, according to the report.
The suit says Neumann “put his trust in [SoftBank and the Vision Fund] to be stewards of WeWork, which he — and thousands of others — had worked so hard to build.” Unlike Softbank, Neumann said in the suit, he “upheld [his] end of the bargain.”
SoftBank’s efforts to undermine the tender included pressuring investors in two joint ventures in Asia, preventing a roll-up transaction from closing which was a prerequisite for the share buyout, according to the court filing.
Neumann has requested his lawsuit be consolidated into another one against SoftBank, filed last month by a special committee of WeWork’s board.
In response, Softbank’s chief legal officer, Rob Townsend, said the company “ will vigorously defend itself against these meritless claims,” the Times reported.
Townend said under the terms of the agreement that Neumann signed, “SoftBank had no obligation to complete the tender offer in which Mr. Neumann — the biggest beneficiary — sought to sell nearly $1 billion in stock.” [FT] — Kevin Sun