The Wall Street Journal: WeWork co-founder Adam Neumann sues SoftBank over collapse of $3 billion deal

The Wall Street Journal: WeWork co-founder Adam Neumann sues SoftBank over collapse of $3 billion deal

5 May    Finance News

WeWork’s co-founder and former chief executive Adam Neumann sued SoftBank Group Corp., accusing the Japanese technology group of breaking a key provision of a deal that gave SoftBank control of the shared-office-space company.

The civil complaint, filed in Delaware’s Chancery Court, is the latest legal tussle over SoftBank’s multibillion-dollar rescue of We Co., the parent of WeWork, and caps the dramatic falling out of SoftBank founder Masayoshi Son and Neumann.

Tokyo-based SoftBank 9984, -0.54% in April terminated an offer to pay up to $3 billion for shares in WeWork, saying conditions to complete the stock sale weren’t met by an April 1 deadline. As part of that deal, which led to Neumann’s ouster from the company’s board, Neumann had the right to sell up to $970 million in stock to SoftBank.

SoftBank, in backing out of the deal, cited “multiple, new and significant pending criminal and civil investigations” that it said began after the October deal. SoftBank said authorities, without specifying which authorities, had requested information about WeWork’s financing activities and its business dealings with Neumann. Neumann says SoftBank’s decision was motivated by its own precarious financial position and taken after failing to secure permission from Neumann and others to change the timing of the tender offer.

An expanded version of this report appears on WSJ.com.

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