A WeWork shareholder has sued the company over the near USD 1.7 billion leaving package approved for ousted co-founder and former chief executive officer Adam Neumann. Natalie Sojka’s lawsuit says the money granted to the former CEO is ‘improper’ and ‘beyond comprehension’. She has accused WeWork investor Softbank and Neumann of abusing their control of the company to benefit themselves at the expenses of smaller shareholders. Neumann stepped down as the CEO of the company in September. He took this decision after the failed attempt at raising money through a stock market floatation. Following this, questions were raised on his leadership skills. The suit has been filed in San Francisco Superior Court. SoftBank CEO Masayoshi Son has been named as a defendant in the suit. WeWork has termed the claims ‘meritless’.
The lawsuit alleges that WeWork IPO had to be withdrawn because of Neumann engaging in self-dealing and despite this, he has been offered a staggering USD 185 million consulting fees. It also alleged that Softbank apparently conceded that it’s the CEO who ruined the company. SoftBank, WeWork, and the law firm representing Natalie Sojka did not immediately respond to requests for comment. According to the LinkedIn profile of Sojka, she worked with WeWork for a 17-month period. Initially, she worked as an executive and then as a team lead.
According to lawsuit, when Sojka voluntarily resigned she had purchased some more stock of the company. WeWork, which recently accepted a financing package from SoftBank, is trimming its business. The company is reportedly palling for thousands of job cuts. The value of WeWork shares has also plunged. Its valuation has also dipped to USD 5.9 billion based on the value of Softbank’s proposed USD 9.5 billion rescue, much below from USD 47 billion in August. Before the bailout package, WeWork received USD 5 billion loans, a USD 3 billion tender offer and another USD 1.5 billion in equity funding from SoftBank.