New York real estate start-up WeWork sues Softbank over “buyer’s remorse”

by   |  VIEW 415

New York real estate start-up WeWork sues Softbank over “buyer’s remorse”

On Tuesday, the 7th of April 2020, a management board of WeWork, the NY-based American commercial real estate firm owned by The We Company that provides tech start-ups and enterprises with shared workspaces, which had negotiated with the Japanese conglomerate SoftBank back in the October last year on a $3 billion tender offer as part of a bailout package for the ailing start-up, had sued the Japanese conglomerate of Masayoshi Son because of suspending the agreed deal, alleging the firm of “buyer’s remorse” amid a global-scale lockdown.

As a matter of fact, the tender offer of $3 billion, which SoftBank had cancelled last week, had been a part of a $9.6 billion bailout package for the shared office space provider reached on October last year which gave SoftBank control over 79 per cent stake of the company, however, since then the office space sharing start-up that employs more than 600,000 people across the globe had been facing off a steep downfall in occupancy rates, as WeWork clients in the big cities remained under lockdown.

Aside from that, while cancelling the tender offer, SoftBank was quoted saying last week that it had decided not to forge ahead with the planned tender offer because a raft of pre-conditions of the offer had not been met, which in effect had infuriated the minority stakeholder’s of the NY-based office space sharing start-up including the company co-founder Adam Neumann whose status had changed in to an ex-billionaire following the SoftBank move, venture capital firm Benchmark Capital alongside the company employees.

Meanwhile, calling the SoftBank decision of backing away from the tender offer was wrongful, an independent two-member special WeWork committee that filed the lawsuit said on Tuesday (April 7th), “SoftBank’s failure to consummate the tender offer is a clear breach of its contractual obligations ...

as well as a breach of SoftBank’s fiduciary obligations to WeWork’s minority stockholders, including hundreds of current and former employees. ”