WeWork Co-Founder Neumann Nears Settlement With SoftBank
(Bloomberg) -- WeWork Co-Founder Adam Neumann is in advanced talks to settle his lawsuit against the co-working company’s biggest backer SoftBank Group Corp., according to people familiar with the matter.
Under the terms of the potential settlement, SoftBank would purchase half of the WeWork shares it originally agreed to buy in 2019, said one the people, who asked not to be identified because the talks are still private. That means Neumann would be able to sell close to $500 million in stock, and that SoftBank would pay about $1.5 billion overall. The shares are being sold at the same price agreed upon in 2019, the person said.
The deal would mean Neumann sells about a quarter of his position in WeWork and remains a major shareholder in the company, the person said, while noting the agreement isn’t finalized and could still change. The agreement could also pave the way for a second attempt at a WeWork public listing, the person added. A spokesman for Neumann and a spokeswoman for SoftBank declined to comment. The Wall Street Journal reported on the talks earlier.
The settlement would bring an end to a high-profile legal dispute between Neumann, WeWork’s former chief executive officer, and SoftBank, which for many years was his most exuberant backer. In 2019, after WeWork’s initial public offering failed, he stepped down and the Japanese conglomerate agreed to buy $3 billion in stock from Neumann and other shareholders as part of a bailout package. The generous exit package for Neumann enraged some WeWork employees when thousands of jobs were cut at the co-working company around the same time.
As the date for the stock sale approached in early 2020 and WeWork saw its business battered by the Covid-19 pandemic, SoftBank pulled out of the deal, citing regulatory concerns and government investigations into the company. Neumann sued, alleging that SoftBank and its Vision Fund relied on legally faulty pretexts to renege on the agreement. An online trial in Delaware Chancery Court is still scheduled to start March 4.
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