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WeWork co-founder Adam Neumann is suing SoftBank over failed $3 billion stock deal

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WeWork co-founder Adam Neumann is suing investor SoftBank for scrapping a $three billion inventory buyout settlement. The New York Times reports that Neumann accused SoftBank of breaching its contract and “secretly taking actions to undermine” the settlement, which SoftBank abandoned last month. He’s trying to merge the case with a similar suit by WeWork’s board in April, however SoftBank has referred to as these claims a “determined and misguided try” to rewrite the deal’s historical past.

SoftBank agreed to bail out The We Firm final 12 months whereas writing off billions of {dollars} on an funding because of WeWork’s unprofitable and ill-advised operations. The deal included a plan to purchase $three billion price of inventory from Neumann and different shareholders. However in April, SoftBank backed out, saying that WeWork hadn’t met the circumstances of its contract. It additionally cited authorized inquiries by the US Division of Justice and the Securities and Alternate Fee. Neumann himself planned to sell $970 million in inventory.

WeWork shareholders accused SoftBank of “purchaser’s regret” and sued for a “clear breach of its contractual obligations.” According to The Guardian, this newest lawsuit says that “Mr. Neumann put his belief in [SoftBank and SoftBank’s Vision Fund] to be stewards of WeWork, which he — and hundreds of others — had labored so laborious to construct,” solely to be met with “brazen” abuses.

SoftBank, conversely, stated that “below the phrases of our settlement, which Adam Neumann signed, SoftBank had no obligation to finish the tender provide during which Mr Neumann — the most important beneficiary — sought to promote practically $1 billion in inventory.”

These fits don’t essentially assist WeWork’s precise monetary scenario, which was shaky even earlier than the novel coronavirus devastated the world economic system. The corporate reportedly missed rent in some places final month, and its model of shared workspaces might translate poorly to a post-pandemic world. Nonetheless, it has tried to keep offices open, whilst governments have required many employees to remain dwelling.

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