SoftBank Settles WeWork Failed Merger Suits

WeWork and co-founder Adam Neumann reached a legal settlement with SoftBank Group that will cement control of the embattled real estate start-up with its largest investor and send the former chief executive on his way with a financial windfall.

The pact announced Friday, February 26, ends a legal fight over a stock transaction that collapsed and eliminates the need for a March 4 trial in Delaware. Terms of the settlement weren’t disclosed.

According to people familiar with the agreement, Neumann will give up for a year his role on the board of the co-working company he helped create, while cashing out roughly US$480 million in stock to SoftBank. Additionally, SoftBank will pay Neumann US$50 million to cover legal fees and another US$50 million as part of a non-compete fee he was previously promised, as well as giving him a five-year extension on a US$430-million loan he owes the Japanese investor.

Neumann can ask for a return to the board as an observer or designate someone in his place, but either request would require SoftBank’s approval, Bloomberg previously reported.

Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.