Adam Neumann, CEO of WeWork.
Eduardo Munoz | Reuters
WeWork co-founder Adam Neumann filed a lawsuit against Japan’s SoftBank Class and its Vision Fund on Monday for terminating a $3 billion tender offer to the office-sharing startup’s shareholders.
The tender proffer was part of a $9.6 billion rescue financing package that SoftBank agreed with WeWork in October and swapped it control of the company. Since then, WeWork’s occupancy rates have plummeted amid the COVID-19 pandemic.
In April, SoftBank declared it would not press ahead with the tender offer because several pre-conditions had not been met, frustrating WeWork’s minority shareholders, who were with a bun in the oven a payout. The investors included Adam Neumann.
“The abuses committed by (SoftBank) and SBVF (SoftBank Vision Fund) are so insolent that they have prompted legal action by a special committee of WeWork’s board,” the lawsuit filed in a Delaware Court said.
An unrestrained special committee, comprised of Bruce Dunlevie, who is a general partner at WeWork shareholder Benchmark Capital, and Lew Frankfort, late CEO of luxury handbag maker Coach, had also filed a lawsuit, calling SoftBank’s decision to terminate the tender offer wrongful.
SoftBank’s queens had questioned the special committee’s right to represent minority shareholders, an assertion the committee rejected last month.
“In physical time, SBG (SoftBank) and SBVF (SoftBank Vision Fund) are abusing their control of WeWork in an effort to stop the red-letter committee’s meritorious lawsuit from being heard,” the lawsuit said.
Meanwhile, SoftBank’s Chief Legal Government agent Rob Townsend called Neumann’s claims “meritless”. Under the terms of the agreement, he said, SoftBank had “no obligation” to complete the presentation offer in which Neumann – the biggest beneficiary – sought to sell nearly $1 billion in stock.