SoftBank Group Corp. Chairman and Chief Executive Officer Masayoshi Son speaks during a press conference on November 6, 2019 in Tokyo, Japan.
Tomohiro Ohsumi | Getty Images
WeWork is suing SoftBank after SoftBank withdrew its $3 billion tender offer, the company announced Tuesday. WeWork is claiming that SoftBank breached its obligations under their agreement.
WeWork alleges SoftBank breached its fiduciary duty to WeWork’s minority shareholders by failing to follow through with the offer. SoftBank said last week its decision to withdraw came from its own fiduciary duty to shareholders.
WeWork was set on a downward spiral after filing its IPO prospectus last year, which revealed a $900 million loss over six months and questionable corporate governance practices. WeWork later withdrew its prospectus and its CEO and co-founder Adam Neumann was ousted. Part of the tender offer would have benefited shareholders including Neumann but also included hundreds of millions for workers whose share values dropped.
The company is seeking to require SoftBank to complete its offer or pay compensatory damages, according to the announcement.
“SoftBank has already received most of the benefits provided to it under the MTA [Master Transaction Agreement], including broad control of WeWork and additional economic benefits,” the special committee of WeWork’s board said in a statement. “SoftBank’s wrongful conduct in failing to consummate the tender offer deprives WeWork’s minority stockholders of the liquidity that they were promised.”
SoftBank declined to comment on the lawsuit.
This story is developing. Check back for updates.
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