WeWork, as anticipated, is suing Japanese tech conglomerate Softbank, for the latter’s walkout from a $3 billion previously agreed share purchase tender fofer. SoftBank had offered to buy shares worth $3 billion in the office space sharing startup WeWork in October 2019. The deal, had it gone through, would have benefitted a select group of investors and controversial founder Adam Neumann.

The We Company, WeWork’s parent entity, has formed an independent two-member special committee of The We Company’s board, suing SoftBank for backing out of its commitment to the startup.

“The Special Committee regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders,” it said in the lawsuit filed in the Chancery Court of Delaware.

The lawsuit had been expected ever since the deal was called off, and came from the committee comprising of  Bruce Dunlevie, who is a general partner at WeWork shareholder Benchmark Capital, and Lew Frankfort, who is the former CEO of luxury handbag maker Coach. In this lawsuit, they deemed the decision “wrongful” and accused SoftBank of breaching the terms of the master transaction agreement (MTA).

“SoftBank’s failure to consummate the tender offer is a clear breach of its contractual obligations under the MTA as well as a breach of SoftBank’s fiduciary obligations to WeWork’s minority stockholders, including hundreds of current and former employees,” the special committee said.

SoftBank, which is the biggest shareholder in WeWork, had agreed to a bailout plan for the startup back in October 2019. The bailout plan also included a $3 billion tender offer, to purchase shares from a few investors and completely buy-out founder Adam Neumann. This was mostly SoftBank’s attempt to save its own capital that it had invested in the startup, after WeWork’s disastrously failed IPO in October. Gross violations at the company and its founder Adam Neumann had come into picture, resulting in withdrawl of WeWork’s IPO. SoftBank was supposed to buy stocks held by the former CEO founder Adam Neumann, Benchmark Capital and other shareholders.

However, SoftBank backed out of the deal last week, citing that all the conditions that were agreed upon for the fulfillment of the investment, had not been met. Most notably, WeWork failed to close the roll up of company’s businesses in China, Japan and rest of Asia (including India). The conglomerate also brought to light criminal and civil probes into the startup, which had led to public humiliation for Adam Neumann.

“When the tender offer was negotiated in October 2019, SoftBank, WeWork, WeWork’s Special Committee, Adam Neumann and SoftBank Vision Fund agreed that SoftBank would not have to close the tender offer unless certain specifically negotiated conditions were satisfied. Several of the closing conditions were not satisfied by the April 1, 2020 deadline.”, said Softbank in a statement.