In a lawsuit filed on Monday, May 4, and announced by WeWork – an American commercial real estate company that provides shared workspaces for companies – on Tuesday, company cofounder Adam Neumann alleged that the investment company and Japanese conglomerate SoftBank breached its contract and fiduciary duty by withdrawing a US$3 billion tender offer for WeWork shares.
SoftBank agreed to buy WeWork shares at an agreed-upon price after the company’s busted initial public offering. The injection was initially planned to be distributed between existing and previous employee-shareholders, shareholders in general, as well as the ousted cofounder, Neumann, who reportedly would have received a hefty exit package valued at US$1.7 billion.
However, in the lawsuit, Neumann stated that the investment group contravened its fiduciary duty to WeWork’s minority shareholders by failing to follow through with the offer. Yet SoftBank states that its decision to withdraw its tender came from its need to uphold its fiduciary duty.
The spokesperson for SoftBank called the lawsuit a “desperate and misguided attempt” to “rewrite” its agreement. The spokesperson also stated that SoftBank had remained committed to WeWork beyond the offer, investing more than US$5 billion since October 2019.
The lawsuit aims to get SoftBank to complete its offer or pay compensatory damages, according to the announcement.