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WeWork Founder & Ex-Billionaire Adam Neumann Sues SoftBank For Renegging On $3 Billion Buyout
As was widely expected, WeWork co-founder and ex-billionaire Adam Neumann has sued SoftBank - the one-time biggest backer of Neumann's former firm - over its decision to reneg on a $3 billion payment, setting the stage for a "The Social Network"-style dramatization pitting the Israeli entrepreneur and Paltrow-cousin-by-marriage against his former chief enabler.
As we've reported, SoftBank recently took advantage of an "out" clause in its agreement with WeWork to get out of forking over the $3 billion. SoftBank had promised to make the payment to WeWork's other shareholders (ie Neumann & a few VCs) as part of a rescue package that also saw $5 billion of capital injected directly into the business.
Fortunately for SoftBank, legal analaysts seem to think it has a strong case. Unfortunately for Neumann, who recently lost his billionaire status and may or may not owe millions of dollars to a consortium of banks, his defense will almost certainly elicit zero sympathy from a jury.
A WeWork committee of two independent directors expressed "disappointment" at SoftBank’s decision, and hinted that the angry investors would respond with lawsuits.
The Special Committee is surprised and disappointed at this development, and remains committed to reaching a resolution that is in the best interest of WeWork and its minority shareholders, including WeWork’s employees and former employees. The Special Committee will evaluate all of its legal options, including litigation,” the committee, made up of Benchmark’s Bruce Dunlevie and another director, Lew Frankfort, said in an emailed statement.
When the news initially broke, a SoftBank spokesman insisted that the decision didn't mean SoftBank was "walking away" from WeWork. And while that may be true (almost none of the $3 billion), the inescapable reality is that the coronavirus outbreak effectively sealed WeWork's fate. The chances of the firm escaping bankruptcy have fallen to near-zero. It's one of the world's great melting ice cubes, except next time around, when the money runs out, the lights are going off, and there won't be anybody coming back the next to brew that fancy "not-corporate" coffee.
But as badly as Neumann wants to rejoin the 'Tres Commas' club, hope - as a wise man once told us - isn't a legal strategy.
https://www.zerohedge.com/geopolitical/wework-founder-ex-billionaire-adam-neumann-sues-softbank-renegging-3-billion-buyout
the convo you had with the old B, know who they are, is correct. tagged you both.
Sure this will be revisited very soon but all you can do.
Shut the other one down cold when they pulled the "I'm a baker" crap.
rest up..need some too.
see you later