Two unbiased WeWork directors have filed a lawsuit in opposition to SoftBank Group Corp., its greatest shareholder, after the Japanese investor scrapped a $three billion settlement to purchase inventory from former Chief Executive Officer Adam Neumann and different shareholders.
SoftBank breached contractual obligations and fiduciary obligation by failing to full the deal, the Special Committee stated in a press release on Tuesday.
“Instead of abiding by its contractual obligations, SoftBank, under increasing pressure from activist investors, has engaged in a purposeful campaign to avoid completion of the tender offer,” stated the committee, made up of Benchmark Capital’s Bruce Dunlevie and one other unbiased director, Lew Frankfort. It added that it “regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders.”
A spokesperson for SoftBank declined to remark. Paul Singer’s Elliott Management Corp. has advocated for the Japanese firm to enhance its worth.
SoftBank had agreed to purchase the shares from Neumann, Benchmark Capital and others as a part of a bailout package deal final yr, however notified stockholders in mid-March that circumstances for the deal hadn’t been met. On Thursday, after the deal’s deadline handed, SoftBank confirmed it will finish the supply, citing 5 circumstances that weren’t happy by the time limit. Of the tender supply, $450 million is presently allotted to present and former workers, in accordance to an individual with data of the matter.
The directors stated SoftBank tried to “thwart” the consolidation of WeWork’s three way partnership in China solely to cite that deal’s lack of completion as a situation that hadn’t been met when it reneged on the tender supply. It additionally cited pending inquiries from numerous authorities entities.
The lawsuit was filed within the Delaware Court of Chancery.