WeWork co-founder Adam Neumann sues Softbank for abuse of power

Adam Neumann, co-founder and former CEO of WeWork, has accused Japanese firm Softbank for what he alleged was its abuse of power in relation to the termination of an agreement to buy $3bn-worth of the company's stock.

The company was initially going to purchase the shares from him and other early investors in the office-sharing company but backtracked on its word at the last minute.

Neumann, who had intended to sell up to $970m-worth of shares, would have been the biggest beneficiary of the transaction.

The lawsuit filed by the former CEO said that SoftBank and its Vision Fund had let down Neumann and the staff at WeWork.

“Mr Neumann put his trust in [SoftBank and the Vision Fund] to be stewards of WeWork, which he — and thousands of others — had worked so hard to build,” the lawsuit said.

“The abuses committed by [SoftBank] and SBVF [SoftBank Vision Fund] are so brazen that they have prompted legal action by a special committee of WeWork’s board,” the lawsuit added.

SoftBank, which intended to buy the company to save it from collapsing after a botched initial public offering, announced early in April that it would be walking away from the agreement.

At the time, the Japanese lender said it had “no choice” but to scrap the rescue deal because WeWork had failed to meet several conditions.

Responding to Neumann’s lawsuit, Rob Townsend, the SoftBank chief legal officer, said: “SoftBank will vigorously defend itself against these meritless claims.”

He added: “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr Neumann – the biggest beneficiary – sought to sell nearly $1bn in stock.”