TOKYO – SoftBank Group Corp. has reached a settlement in a U.S. legal dispute with WeWork Inc. office space-sharing campaign leaders. and founder Adam Neumann, the Japanese technology company said Saturday.
The terms of the settlement at the Delaware Chancery Court have not been made public. Citing people familiar with the case, the Wall Street Journal reported Thursday that Neumann planned to receive an additional $ 50 million in windfall and other benefits as part of the deal.
SoftBank Group has not released further details of the agreement which dispels the bitter controversy emerging from the Japan-based company’s 2019 decision to ban WeWork, which was once seen as a tall unicorn but quickly grew into deep trouble as he lost money and canceled the much-awaited share offer.
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Neumann was fired as WeWork’s chief executive in September 2019 because of the company’s declining value and amid heavy criticism of his conduct and regulation. In October 2019 WeWork was taken over by SoftBank, which spent more than $ 5 billion on the move. Neumann walked away with nearly $ 2 billion.
But some investors, and Neumann, were not satisfied with the cash deals offered and then objected to SoftBank alleging that the investment firm had breached its obligations by backing a $ rescue plan 3 billion.
A sign marks the location of the WeWork office facility on August 14, 2019 in Chicago, Illinois. (Scott Olson / Getty Images / AFP)
Under the resolution of the controversy, the Wall Street Journal reported, SoftBank Group would buy about $ 1.5 billion of stock from other investors, including nearly $ 500 million from Neumann, about half of what they originally intended to buy.
The windshield agreement would give the controversial founder $ 50 million, another $ 50 million to cover his legal fees and extend SoftBank Group’s five-year loan, according to reports.
“With this law behind us, we are fully focused on reiterating our mission in the workplace and continuing to meet the growing demand for flexible space across the world. global, ”said Marcelo Claure, executive chairman of WeWork and chief executive of SoftBank International Group.
Neumann, who was born in Israel and raised partly on a kibbutz, had taken the tech startup world by storm with his company in the 2010s. At its peak, WeWork was a brilliant one-horn with $ 47 billion, and SoftBank founder Masayoshi Son had given Neumann’s vision an open look.
Softbank group CEO Masayoshi Son will answer a question at a press conference announcing the company’s financial results in Tokyo, 7 August 2019. (Toshifumi KITAMURA / AFP)
When it agreed to SoftBank support, its valuation stood at around $ 8 billion.
SoftBank has been a major shareholder in WeWork, and its cumbersome results, particularly amid coronary virus pandemic, have negated SoftBank’s financial results.
SoftBank says WeWork has potential, especially in markets like Japan, where office space is expensive and where employee journeys tend to be long. SoftBank also invests in artificial intelligence, internet services, sustainable energy and IoT.
Luke Tress contributed to this report.
