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WeWork Co-Founder Adam Neumann Is Suing SoftBank For Backtracking On $3B Tender Offer

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WeWork Co-Founder Adam Neumann Is Suing SoftBank For Backtracking On $3B Tender Offer

WeWork's co-founder and former CEO Adam Neumann on Monday sued SoftBank Group Corp. (OTC: SFTBY) for breach of contract.

SoftBank reneged on a promise to buy the shares from other stakeholders, including investors, employees, and him, based on faulty legal grounds for the benefits it already received, Neumann alleged, as reported by Bloomberg.

The lawsuit states SoftBank was "secretly taking actions to undermine'' the $3 billion tender offer by attempting to sabotage the roll-up of a WeWork Chinese subsidiary, which was one of the conditions to complete the offer.

According to Neumann, SoftBank's deteriorating financial condition contributed towards its decision to backtrack on the deal.

SoftBank chief legal officer Rob Townsend told Bloomberg it had "no obligation to complete the tender offer" under the terms of their agreement.

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The WeWork-Softbank Connection

The Japanese venture capital firm had acquired an 80% stake in the troubled startup in October last year as part of a $9.5 billion rescue deal.

Neumann was set to benefit the most from the deal, who would get to walk away with more than $1 billion as part of the tender offer, including through stock purchases, and consultation fees.

SoftBank said in early April that it won't complete the tender offer because WeWork couldn't meet the conditions agreed to as part of the agreement.

Two other early investors in WeWork, Benchmark general partner Bruce Dunlevie and former Coach Inc. CEO Lew Frankfort, were also set to benefit from the offer and filed a separate lawsuit against SoftBank last month.

Photo courtesy of WeWork.

 

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