SoftBank To Pay Almost USD 500 Million To WeWork Founder Adam Neumann Under A Settlement Agreement

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WeWork co-founder Adam Neumann is likely to be paid around USD 500 million under the proposed settlement over payout with SoftBank. The development comes less than two years after the departure of the former Chief Executive Officer of the company. Neumann had to leave the company after the high-profile failure of its IPO. SoftBank is now nearing a settlement with him under which it will USD 480 million to purchase 25 percent of his stake in the company. This deal will also bring an end to the ongoing bitter legal battle which started in October 2019 in the wake of the collapse of the initial public offering.

SoftBank is in advanced talks with Neumann as well as other shareholders. The bank is expected to purchase shares worth USD 1.5 billion from early WeWork investors. The deal would be for around USD 10.5 percent shares of the office-sharing company. The price share under the deal would be around USD 19.19, as agreed upon initially. Neumann would remain a major shareholder in WeWork, people privy with the development said. The talks started after there were reports that WeWork was in talks with Bow Capital Management, affiliated with SPAC, for the merger.

The Japanese investing giant had agreed to buy USD 3 billion of shares at a time when it was close to running out of cash. The deal also included USD 185 million consulting fees for Neumann over the next four years. It was highly criticized by people at that time. The bank went back on its promise in April when the deadline with the deal was approaching saying certain conditions of the deal has not been fulfilled. Following this, Neumann and other investors sued and led to a legal skirmish. The trial is set to begin in early March. With the beginning of the legal fight, SoftBank had discontinued consulting fees of Neumann.

 

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