Adam Neumann, cofounder and former CEO of WeWork, has filed a lawsuit against the company’s largest backer SoftBank after it backed away from a $3 billion tender offer to buy back shares from stockholders.
The deal would have given Neumann nearly $1 billion, and he claims that SoftBank abused its power by walking away from the deal.
Neumann has accused the Japanese conglomerate of a breach of contract and fiduciary obligations, stating that he would not have given up control of the coworking company without the deal.
“SoftBank will vigorously defend itself against these meritless claims,” said Rob Townsend, SoftBank’s chief legal officer. “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr. Neumann — the biggest beneficiary — sought to sell nearly $1 billion in stock.”
This suit follows the special committee of WeWork’s board also suing SoftBank over the cancellation of the deal.
SoftBank backed away from the deal early last month after claiming that WeWork had failed to meet conditions, including getting antitrust approvals or closing joint ventures in Asia, and also cited the several investigations into the coworking firm after its failed IPO last year.
Neumann’s net worth was cut by 97% to $450 million due to the cancellation of the tender offer, revoking his billionaire status, according to Bloomberg.