WeWork ex-CEO Neumann, Softbank sued over botched IPO, pummelled value


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WeWork ex-CEO Neumann, Softbank sued over botched IPO, pummelled value

Late on Friday, the 8th of November 2019, some of the top executives of the online office sharing start-up, WeWork, including its co-founder and ex-CEO Adam Neumann who stepped down later last month after Japanese investment conglomerate, SoftBank Corp.

had approached him with a $1.7 billions escape deal, were sued in a Class Action Lawsuit by a number of minority stakeholders of WeWork including some of the former WeWork employees, as the shared office-space provider had shelved its planned IPO and witnessed a massive hit with a whiplash in its market valuation, which was plummeted more than 87 per cent from a February campaign this year.

Aside from that, in the US Superior Court of San Francisco, a Class Action Lawsuit was filed by the WeWork employee, Natalie Sojka, accusing the company’s management board of violating its fiduciary duties towards minority stakeholders.

In point of fact, Sojka, a former WeWork employee and a minority stakeholder, had accused the board of misleading shareholders over its last-ditch attempt to allow Japan’s SoftBank Group to save the company from a potential collapse with a stake raise of 80 per cent from an earlier 29 per cent, which in effect had made Japan’s SoftBank the controlling stakeholder of the company, instead of JP Morgan Chase & Co.

$5 billion offer in debts. Nonetheless, undermining impacts of the Class Action Lawsuit, a spokeswoman for SoftBank-owned WeWork said late on Friday, “WeWork believes this lawsuit is meritless”.