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Adam Neumann Wants To Sue SoftBank Over The Killed $3B Bailout

Adam Neumann Wants To Sue SoftBank Over The Killed $3B Bailout
The We Company co-founder and CEO Adam Neumann

Ousted WeWork founder Adam Neumann is reportedly gearing up to sue SoftBank Group over a soured deal for the Japanese company to buy $3B worth of the coworking firm’s shares.

WeWork shareholders said earlier this month the company is suing SoftBank, WeWork’s biggest backer, claiming the Tokyo-based firm's plan to kill a $3B share-buying commitment is a breach of contract and its fiduciary duty.

The Special Committee for The We Company Board of Directors filed the lawsuit in Delaware, and requested the court force SoftBank to hold up its end of the deal. A trial date has been set for January.

SoftBank’s lawyer, however, claims the committee “lacks authority,” Bloomberg reports. Neumann, who was driven out of his role of CEO in September amid the company’s IPO blowup, is now planning to sue, per the publication.

“Adam Neumann has also said that he intends to file a complaint,” SoftBank’s attorney, Morrison Foerster’s Erik Olson, wrote, according to Bloomberg, which reviewed the letter. “There is no need for WeWork to allow its cash reserves to be used to finance an expensive lawsuit intended to generate material personal benefits for the Special Committee directors and the funds they control.”

SoftBank agreed last year to bail out WeWork, injecting the startup with billions in cash. However, earlier this month, it said it was dropping plans to buy $3B worth of WeWork shares, citing criminal and civil investigations of WeWork — as well as the coronavirus pandemic — as the reasons.

It is just one of WeWork’s mounting problems, as the office industry as a whole battles to deal with the fallout of the global crisis. Many of WeWork’s members are canceling their leases. Meanwhile, at flexible workspace provider Knotel, a third of tenants have asked for rent relief. Both firms have reportedly skipped rent payments, and Knotel is planning to hand back 20% of its portfolio to landlords. 

Related Topics: WeWork , Adam Neumann , SoftBank , Knotel