Former WeWork CEO Adam Neumann After an executive said he had breached a contract with SoftBank, the co-working company reportedly was handed only a portion of the $185 million consulting fee that was part of the retirement package.
According to The Wall Street Journal, Marcelo Claure of Softbank, who served as Chairman of WeWork in 2019, said he does not believe that the multi-million dollar “consulting contract is still in effect.”
Claure said at a Wall Street Journal event on Monday, “It’s possible that Adam breached part of his consulting contract, so it’s no longer in effect.” However, he did not comment on how Neumann breached the contract.
SoftBank dominated the company last fall after injecting $5 billion in urgently needed capital into We Company. As part of the acquisition, Neumann was pushed out, and Claure, who oversaw Sprint’s merger, led WeWork to strengthen corporate governance.
Claure said Neumann, who initially co-founded WeWork in 2010, helped SoftBank understand the company.
As part of the controversial Neumann exit package, the Japanese tech giant said it would pay $1 billion for the company’s stock, extend its $500 million credit line, and pay $185 million in consulting fees.
It also includes a four-year non-competitive contract stating that Neumann is no longer bound, anyone familiar with the matter told the Journal. He added that he did not receive the full consulting fee.
WeWork filed a lawsuit against SoftBank Group Corp earlier this year after a Japanese conglomerate canceled a $3 billion bid offer.
Neumann resigned as CEO of WeWork in September 2019 shortly after the company postponed its public offering. The company was struggling to raise interest in the offer after revealing massive losses in IPO filings. WeWork’s sales surged to $1.8 billion in 2018, but lost $1.6 billion in the same year.
Representatives from SoftBank and WeWork did not immediately respond to requests for comments from FOX Business.
The Associated Press contributed to this report.