Tensions brew on WeWork’s board with appointment of new members

A legal dispute between SoftBank and a special committee on the board is playing out in court

National /
May.May 28, 2020 01:10 PM
Frederick Arnold, formerly of Convergex and Alex Dimitrief, formerly of General Electric (Getty, Twitter Navient)

Frederick Arnold, formerly of Convergex and Alex Dimitrief, formerly of General Electric (Getty, Twitter Navient)

A brewing dispute at WeWork is set to intensify after a Delaware court approved the co-working company’s decision to appoint two new directors.

WeWork told the court Wednesday that the company’s board planned to meet Friday to vote on the new appointments, the Financial Times reported. The candidates for the vacant board seats are Alex Dimitrief, formerly of General Electric, and Frederick Arnold, formerly of Convergex.

The appointments are expected to ramp up tensions between SoftBank and a special committee of the board, which recently sued SoftBank over its decision to terminate a $3 billion tender offer.

SoftBank, which has four of the eight filled board seats, questioned whether the committee had the authority to take such an action on the co-working company’s behalf. The new directors would be tasked with evaluating this question.

The special committee sought to block the appointments, however a court denied the request.

“We believe SoftBank has no basis to question the special committee’s authority to bring this action and we are pleased by the court’s recognition that any effort by SoftBank to challenge that authority must be presented to the court,” a spokesperson for the special committee said in a statement Wednesday.

In response, a spokesperson for the co-working company told the FT that “WeWork is pursuing best practices of corporate governance to determine what role if any WeWork should have in this contractual dispute among its shareholders. The court’s decision today allows that process to go forward.”

A trial date has been set for January 11. [FT] — Sylvia Varnham O’Regan


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