San Francisco, WeWork Co-founder and former Chief Executive Officer Adam Neumann has filed a fresh lawsuit in the US against the SoftBank Group for backing out of a $3 billion tender offer for shares of the co-sharing workspace company.
The lawsuit filed in Delaware Court of Chancery on Monday accused WeWork’s biggest backer of breaching of contract and as well as fiduciary duty, TechCrunch reported.
The lawsuit included a motion to consolidate his case with a previous lawsuit filed by a Special Committee of WeWork’s board last month.
The focus of both the lawsuits is SoftBank Group and its Vision Fund’s decision to abandon the share purchase deal.
“SoftBank will vigorously defend itself against these meritless claims,” Rob Townsend, Senior Vice President and Chief Officer at SoftBank, was quoted as saying in a statement.
“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.”
The SoftBank Group cited the impact of COVID-19 on the business and alleged that several pre-conditions were not met before abandoning its $3 billion tender offer for the embattled co-sharing workspace firm’s shares on April 1.
“SoftBank has abused its position of power to “renege on its promise to pay (Neumann, shareholders, and hundreds of employees) for the benefits it already received,” the complaint by Neumann said.
Japan-based SoftBank last October announced the infusion of $5 billion into the struggling WeWork. It had said that it would provide up to $3 billion for the existing shareholders of WeWork.