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SoftBank To Give WeWork's Adam Neumann Extra $50M As Part of Settlement Deal

SoftBank To Give WeWork's Adam Neumann Extra $50M As Part of Settlement Deal

WeWork’s co-founder Adam Neumann is set to benefit from a $50 million bonanza along with other benefits as a part of a settlement agreement with SoftBank Group Corp (OTC: SFTBY), the Wall Street Journal reported Wednesday.

What Happened: SoftBank will give the former WeWork CEO a $50 million in a special payout and a five-year term extension on a $430 million loan made out to him in 2019, people familiar with the matter told the Journal.

SoftBank is also due to pay $50 million for Neumann’s legal fee. 

Neumann and other early investors in WeWork are reportedly nearing a deal with the Japanese conglomerate, where the latter would purchase $1.5 billion of stock from other investors, including almost $500 million from Neumann, according to the Journal.

SoftBank shares traded 3.74% higher in Tokyo at press-time.

Why It Matters: The largesse for Neumann sets him apart from other shareholders. If the deal is reached, a trial in March could be averted, noted the Journal.

In April last year, WeWork sued SoftBank after the latter canceled plans to purchase $3 billion of WeWork’s shares. 

The extra payment to Neumann is unlikely to go down well with WeWork’s employees and investors, who were furious when a $185 million payment was revealed, as per the Journal.

WeWork is negotiating a possible merger with the blank check company BowX Acquisition Corp (NASDAQ: BOWX) in order to go public. The two firms could reach an agreement as early as next week, according to the Journal’s sources.

Price Action: On Wednesday, SoftBank OTC shares closed nearly 1.7% lower at $47.75.

Image: TechCrunch via Wikimedia


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