WeWork’s owner, The We Company, has sued SoftBank Group, challenging its largest shareholder’s decision to terminate a $3 billion tender offer for shares in the office-space sharing firm.
An independent two-member special committee of The We Company’s board filed the lawsuit, saying that SoftBank had breached its contractual obligations by abandoning the tender offer.
“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.
In the lawsuit, the special committee called SoftBank’s decision to terminate the tender offer “wrongful” and alleged that SoftBank had breached its obligations under 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.
Last week, SoftBank said it terminated the proposed tender offer for additional WeWork shares, citing criminal and civil probes into the startup, its failure to restructure a joint venture in China and the impact of the coronavirus pandemic.
WeWork has been hit particularly hard by the outbreak, as its occupancy rates have plunged over the past month and its largest clients have been forced to vacate.