Softbank has announced it has reached a $1.6bn settlement to a lawsuit brought against it by ex-WeWork chief executive Adam Neumann and the special committee of the board of WeWork.
Softbank said it would pay out $1.6bn to settle the lawsuit, but said the payment was not an admission of liability.
The Wall Street Journal reported on 22 February that the parties were nearing an agreement in which SoftBank, WeWork’s majority shareholder, would buy about $1.5bn of stock from other investors, including nearly $500m from Neumann.
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The WSJ also reported that under the deal, SoftBank would give Neumann a $50m special payout, extend by five years a $430m loan it made to him in 2019 and pay $50m for his legal fees.
In Softbank’s filing that confirmed the settlement, it did not give any breakdown of the $1.6bn payment.
Softbank took a majority stake in WeWork after its attempted initial public offering collapsed in 2019.
Neumann sued SoftBank in May 2020, accusing the Japanese technology group of breaking a key provision of a deal that gave SoftBank control of WeWork.
SoftBank in April 2020 terminated an offer to pay up to $3bn for shares in WeWork, saying conditions to complete the stock sale were not met by a 1 April deadline. As part of that deal, Neumann had the right to sell up to $970m in stock to SoftBank.
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Neumann stepped down from WeWork’s board as part of that deal.
WeWork has been in talks with a SPAC called BowX Acquisition, The WSJ reported.
If a deal between the two goes through, WeWork could become a public company valued at $10bn, the report said.
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