WeWork and co-founder Adam Neumann reached a legal settlement with SoftBank Group that will cement control of the embattled real estate start-up with its largest investor and send the former chief executive on his way with a financial windfall.
The pact announced Friday, February 26, ends a legal fight over a stock transaction that collapsed and eliminates the need for a March 4 trial in Delaware. Terms of the settlement weren’t disclosed.
According to people familiar with the agreement, Neumann will give up for a year his role on the board of the co-working company he helped create, while cashing out roughly US$480 million in stock to SoftBank. Additionally, SoftBank will pay Neumann US$50 million to cover legal fees and another US$50 million as part of a non-compete fee he was previously promised, as well as giving him a five-year extension on a US$430-million loan he owes the Japanese investor.
Neumann can ask for a return to the board as an observer or designate someone in his place, but either request would require SoftBank’s approval, Bloomberg previously reported.
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