SoftBank Group Corp. (“SoftBank”) today announced that it has entered into a settlement agreement with the Special Committee of the Board of Directors of WeWork Inc. (formerly referred to as The We Company) (“the Special Committee”) and WeWork’s founder, Adam Neumann. The terms of the settlement are confidential. When completed, the settlement agreement would resolve all claims brought in a lawsuit in the Delaware Court of Chancery, and is in the best interests of all parties.
“This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork. SoftBank and WeWork have spent the past year transforming the WeWork business and executing on our plan towards profitability. With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world.” — Marcelo Claure, Executive Chairman of WeWork, CEO of SoftBank Group International, and Corporate Officer, Executive Vice President and COO of SoftBank.
The Wall Street Journal previously outlined the likely settlement:
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.