Softbank head Masayoshi Son has accepted his ‘mistakes’ and ‘poor judgement’ on WeWork investment. But seldom you will find, that mere apologies aren’t enough when it comes to financial losses. And when financial losses run in billions, it makes things even more complicated.
Seems like WeWork’s troubles have merely begun. While a botched IPO has literally obliterated the company’s previous private equity values, it is now turn of some legal, class-action stuff to take center stage. Minority shareholders of the company are now suing WeWork, its billionaire founder Adam Neuman and Softbank over the mess that the company has become.
According to a report from Reuters, former WeWork employee Natalie Sojka has accused the company’s board of directors of breaching its fiduciary duties to minority shareholders like her. This is being done in the form of a proposed class action law suit. Many more could join the suit if this gains enough traction.
In her suit, Sojka has accused the company’s board for letting Japanese behemoth SoftBank Group to rescue WeWork. Just for a refresher, Softbank had saved WeWork from the deathly hallows by boosting its stake to a potential 80% from 29% at a “fire-sale” price, and granting Neumann a $1.7 billion exit package. Softbank and its chairman, Masayoshi Son, are among the 10 named defendants in the Nov. 4 complaint.
In a statement issued by a WeWork spokesperson to Reuters, the company says “WeWork believes this lawsuit is meritless.” Well ofcourse.
WeWork saw its IPO attempt getting squandered midway, post which the company saw its value plummeting to $5.9Bn from the $47Bn it commanded just a couple of months ago. The value was less than the total investment committed by Softbank to the company at that point of time. Later, multiple misdoings within the company were revealed, involving founder Adam Neuman and his family circle.