7-.
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`(CITACION JUDICIAL)
`NOTICE TO DEFENDANT:
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`SUMMONS
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`(AVISO AL DEMANDADO):
`, ADAM NEUMANN, BRUCE DUNLEVIE, RONALD FISHER,
`[Additional Parties Attachment Form is attached]
`
`YOU ARE BEING SUED BY PLAINTIFF:
`(LO ESTA DEMANDANDO EL DEMANDANTE):
`NATALIE SOJKA, on behalf of herself and all others similarly situated
`and derivatively on behalf of THE WE COMPANY,
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`OOVO‘ISE'SW
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`AOTVSV3'55HEELSNOSIHHVH658
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`I
`SUM-100
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`FOR COURT USE ONLY
`(SOLO PARA USO DE LA CORTE)
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` NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 80 days. Read the Information
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`below.
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`You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copy
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`served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your
`case. There may be a court form that you can use for your response. You can find these court forms and more information at the California Courts
`Onllne Self-Help Center (www.courtinfo.ca.gov/selfhelp). your county law library. orthe courthouse nearest you. if you cannot pay the filing fee. ask
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`the court clerk for a fee waiver form. if you do not file your response on ti me. you may lose the case by default. and your wages. money. and property
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`may be taken without further warning from the court.
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`There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney. you may want to call an attorney
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`referral service. If you cannot afford an attorney. you may be eligible for free legal services from a nonprofit legal services program. You can locate
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`these nonprofit groups at the California Legal Services Web site (wwaawheIpcalifornla. org). the California Courts Onllne Self-Help Center
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`(www.courtinfo.cagov/selflrelp), or by contacting your local court or county bar association. NOTE: The court has a statutory lien' for waived fees and
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`costs on any settlement or arbitration award of $10,000 or more In a civil case. The court's lien must be paid before the court will dismiss the case.
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`[AVISOI Lo han demandado. S/ no responds dentro de 30 dies. la corte puede decldlr en su contra sln escuchar su version. Lea Ia informacién a
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`continuacion.
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`Tiene 30 DIAS DE CALENDAR/O después de que lo entreguen esta cltacion y papeles legales para presenter una respuesta por escrito en esta
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`corte yhacer que se entregue una copia al demandante. Una carta o una llamada telefénlca no lo protegen. Su respuesta por escrlto tiene que esiar
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`en formato legal correcto sl desea que procesen su case en la corte. Es posible que haya un formularlo que usted puede usar para su respuesta.
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`Puede encontrar estos formularlos de la corte y mas lnformaclén en el Centro de Ayuda de las Cortes de California (www.sucorte.ca.gcv), en la
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`biblioteca de leyes de su condado 0 en la corte que le quede mas cerca. Si no puede pager Ia cuota de presentacién, plda a/ secretario de la corte
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`que Ie dé un formulario o’e exencién de pago de cuotas. Si no presenta su respuesia a tiempo, puede perder el caso por incumplimiento y la corte le
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`podré qultar su sue/do. dinero y bienes sin mas advertencia.
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`Hay otros requisitos Iegales. Es recomendab/e que llame a un abogado inmediatamente. Si no conoce a un abogado, puede Ilamar a un servlcio de
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`remlsldn a abogados. SI no puede pager a un abogado, es posIb/e que cumpla con los requlsltos para obtener servlcios legaies gratuitos de un
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`programa de servlcios legales sln fines de Iucro. Puede encontrar estos grupos sin fines de lucro en el sitio web de California Legal Services,
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`(www.lawhe|pcalifornla.org), en 9] Centro de Ayuda de Ias Cortes de California, (www.3ucorte.ca.gov) o poniéndose en contacto con la corte 0 el
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`co/egio de abogados locales. A V/SO: Por ley, la corte tiene derecho a reclamar Ias cuotas y los costos exentos por lmponer un gravamen sobre
`31 cualquler recuperacio’n de $10. 000 6 mas de valor reclblda mediante un acuerdo o una concesion de arbitraje en un caso de derecho civil. Tiene que
`r pager el gravamen de la corte antes de que la corte pueda desechar e/ caso.
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`CASE NUMBER:
`2l'he name and address of the court is:
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`§Eifnombre y direccldn de la corte es):
`(Wig-391 9 m5 8 Q [ill 7 d3
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`m n
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`I'Tl
`r Sfiperior Court of California, County of San Francisco
`€400 McAllister Street, San Francisco, California 94102
`EThe name. address. and telephone number of plaintiff's attorney. or plaintiff without an attorney. is:
`fl(El nombre, la direccion y el nLimero de ie/éfono del abogado del demandante, 0 del demandante que no tiene abogado, es):
`BOTTINI & BOTTINI, INC., 7817 Ivanhoe Ave, Suite 102, La Jolla, CA 92037 (858) 914-2001
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`nov 042019 ClerkoftheCourt
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`£3
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`1
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`(Adjunto)
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`(Secretario)
`(Fecha)
`(For proof of service of this summons, use Proof of Service of Summons (form POS-010).)
`(Para prueba do entrega de esta citatién use a! formulario Proof of Service of Summons. (POS-010)). ANGELICA SUNGA
`NOTICE TO THE PERSON SERVED: You are served
`1. I: as an individual defendant.
`2. [:1 as the person sued under the fictitious name of (specify):
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`3_ 1:] on behalf of (specify):
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`[:1 cop 416.60 (minor)
`under: El cop 416.10 (corporation)
`[:| CCP 416.70 (conservatee)
`[:1 GOP 416.20 (defunct corporation)
`|:] CCP 416.40 (association or partnership) El CCP 416.90 (authorized person)
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`I:] other (specify):
`4. [:I by personal delivery on (date): Pa 91 of 1
`Form Adopted for Mandatory Use
`5 U M MONS
`Code of Civil Procedure §§ 412.20. 465
`Judicial Council of California
`www.couri/nia.ca.gov
`SUM-100 [Rev. July 1. 2009]
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`

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`SHORT TITLE:
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`Sojka V. Neumann, et a1.
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`CASE NUMBER:
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`sum-200m)
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`INSTRUCTIONS FOR USE
`+ This form may be used as an attachment to any summons if space does not permit the listing of all parties on the summons.
`+ If this attachment is used, insert the following statement in the plaintiff or defendant box on the summons: "Additional Parties
`Attachment form is attached."
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`List additional parties (Check only one box. Use a separate page for each type of party):
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`[:I Plaintiff
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`Defendant I: Cross—Complainant
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`[:1 Cross-Defendant
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`LEWIS FRANKFORT, STEVEN LANGMAN, MARK SCHWARTZ, JOHN ZHAO, MASAYOSHI SON,
`SOFTBANK GROUP CORPORATION, DOES 1—25, and THE WE COMPANY.
`
`F°33dt§§féiimfgiilififis°
`SUM-200W [Rev. January 1. 2007]
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`ADDITIONAL PARTIES ATTACHMENT
`Attachment to Summons
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`Page
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`of
`Page 1 of 1
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`

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`B01[IN] & BOT'I‘INI, INC.
`
`FrancisA. Bottini, Jr. (SBN: 175783)
`Albert Y. Chang (SBN 296065)
`Yury A. Kolesnikov (SBN: 271173)
`7817 Ivanhoe Avenue, Suite 102
`
`La Jolla, California 92037
`Telephone: (858) 914—2001
`Facsimile: (858) 914-2002
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`Counselfor Plaintiff
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`FILED
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`San Francisco County Superior Court
`
`NOV 0 4 2019
`
`CLERK OF THE COURT
`By: 7g ;
`DeputyCIerk ‘
`ANGELICA SUNGA
`
`SUPERIOR COURT OF THE STATE OF CALIFORNIA
`
`FOR THE COUNTY OF SAN FRANCISCO
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`NATALIE SOJKA, on behalf of herself and all
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`others similarly situated and derivatively on
`behalf of THE WE COMPANY,
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`Case No.: 666 m 19 ”fig £1]? ? £11.
`
`ClaichiJm
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`Plaintiff,
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`SHAREHOLDER CLASS ACTION
`AND DERIVATIVE COMPLAINT
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`VS.
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`ADAM NEUMANN, BRUCE DUNLEVIE,
`
`RONALD FISHER, LEWIS FRANKFORT,
`STEVEN LANGMAN, MARK SCHWARTZ,
`JOHN ZHAO, MASAYOSHI SON,
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`SOFTBANK GROUP CORPORATION, and
`DOES 1—25,
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`— and —
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`Defendants,
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`THE WE COMPANY,
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`Defendant and Nominal Defendant.
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`FOR BREACH OF FIDUCIARY DUTY,
`AIDING AND ABETTING BREACH OF
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`FIDUCIARY DUTY, CORPORATE
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`WASTE, UNJUST ENRICHMENT,
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`ABUSE OF CONTROL, AND
`DECLARATORY AND INJUNCTIVE
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`RELIEF
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`DEMAND FOR JURY TRIAL
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`OOVO'ISE'ST’V
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`LOWEV3'35IEEIHISNOSIHHVH658
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`3111\1931EIGIMNOIIVN
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`Shareholder Class Action and Derivative Complaint
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`\DOO\]O\Ul-I>UJI\)r—A
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`[\J[\J[\JNNN[\JN[\Jr—Ai—AHr—Ar—tr—t>—Ir—d)—A)—A00\lC\U)JkDJ[\JHO\O00\1ONUl#U)Nt—‘O
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`Plaintiff Natalie Sojka, by her attorneys, alleges the following on information and belief,
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`except as to the allegations specifically pertaining to Plaintiff, which are based on personal
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`knowledge.
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`NATURE AND SUMMARY OF THE ACTION
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`1.
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`Plaintiff brings this class action on behalf of the minority stockholders of The We
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`Company (“WeWor ”, “We” or the “Company”) against The We Company and its Board ofDirectors
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`(the “Board” or the “Individual Defendants”) and Softbank Group Corporation (“Softbank”) for breach
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`of fiduciary duty, aiding and abetting breach of fiduciary duty, corporate waste, and declaratory as well
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`as injunctive relief. Defendant Adam Neumann (“Neumann”), the founder, Chaimian, CEO, and
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`controlling shareholder of The We Company, in concert with Softbank, are using their control of The
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`We Company to benefit themselves to the detriment ofthe Company’s minority shareholders. Plaintiff
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`brings claims against the Defendants for their breaches of fiduciary duty and/or for aiding and abetting
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`other Defendants’ breaches of fiduciary duty. Defendants’ actions are substantially unfair to The We
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`Company’s minority shareholders and have caused and will continue to cause significant damage to the
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`Company and its shareholders.
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`2.
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`Neumann and Softbank are attempting to use their control of the Company to benefit
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`themselves to the detriment ofthe Company’s minority shareholders. Neumann has recently abused his
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`control ofthe Company to usurp $1.7 billion in payments to himself, which payments were approved by
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`Softbank. Softbank stands to benefit from the proposed transactions because it is increasing its stake by
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`buying up shares at depressed values which were created by Defendants" own wrongdoing. At the same
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`time, the value of the stock and options held by minority shareholders has been eviscerated due to
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`Neumann’s wrongdoing, with their stock options being underwater and the value of their stock being
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`driven to levels well beyond what they paid for the stock. See Rani Molla, “85 Percent of WeWork’s
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`White-Collar Employees Don’t Think Adam Neumann’s $1.7 Billion Exit Package is Fair,” RECODE,
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`Oct. 28, 2019. Softbank is attempting to further benefit from its wrongdoing and that ofNeumann by
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`trying to commence a tender offer to buy out minority shareholders, thereby increasing its control ofthe
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`Company to approximately 80% and giving it outright control of the Company. The price Softbank
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`purportedly intends to offer minority shareholders — $19.19 — is grossly unfair and represents an abuse
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`Shareholder Class Action and Derivative Complaint
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`2
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`I
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`of control by Neumann and Softbank, and unfair treatment of minority shareholders. The proposed
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`transactions are subject to entire fairness review under California law.
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`U)
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`\OOO\]O\UI-l>
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`3.
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`It is an axiomatic principle of corporate law that a wrongdoer cannot benefit from his own
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`wrongdoing. This principle has heightened application in the context of a situation such as the present
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`case where the defendants are majority and controlling shareholders who owe fiduciary duties to the
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`minority shareholders. The self-interested transactions being proposed by Softbank and Neumann are
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`not entirely fair to the minority shareholders. Neumann, who ruined WeWork,
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`is being treated
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`disparately, and both he and Softbank would receive unique benefits not shared by the minority
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`shareholders if the transactions are not enjoined. See Rani Molla, “Why WeWork Founder Adam
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`10
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`Neumann is Getting $1.7 Billion to Leave the Company He Ran into the Ground,” RECODE, Oct. 22,
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`2019. Among other things:
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`(a)
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`Neumann stands to receive much more for his shares than the consideration being
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`offered to minority shareholders in the tender offer to be launched by Softbank, which tender offer is
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`coercive and both procedurally and substantively unfair;
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`(b)
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`In addition to payment of more money for Neumann’s stock, Softbank is
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`proposing to pay Neumann $500 million to pay offhis personal loanfrom JPMorgan Chase, which
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`was one ofthe underwritersfor thefailed [PO and which holds alien on Neumann ’s We Work stock;
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`(0)
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`The transactions, if not enjoined, will further substantially dilute minority
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`shareholders who do not accept the grossly unfair tender offer;
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`(d)
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`Despite breaching his fiduciary duties by engaging in self-dealing and
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`mismanaging WeWork so badly that its IPO had to be withdrawn, Neumann is being oflered a
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`staggering $185 million “consulting fee” despite the fact that Softbank seems to concede that
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`23
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`Neumann ruined the Company.
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`It is beyond comprehension why Neumann would be paid $185
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`24
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`million to provide strategic guidance to the Company when his “guidance” resulted in the virtual
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`‘25
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`destruction of the Company. Instead, thefee simply represents self-dealing and an improperpersonal
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`26
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`payment to Neumann. To put Neumann’s $185 million consulting fee in perspective, the 200 highest-
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`paid CEOs at public companies last year had a median pay of $18.6 million, according to Equilar.
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`28
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`Typically, CEOs receive exit packages that are multiples of their salary and bonus. Neumann’s
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`Shareholder Class Action and Derivative Complaint
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`3
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`

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`consulting fee alone would equal 10 years ofthat median salary. The terms ofNeumann’s “consulting”
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`agreement have not yet been disclosed.
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`4.
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`The We Company (which was known as WeWork until July 2019, and is frequently
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`referred to herein as such) attracted talented individuals to work at WeWork by awarding employees
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`stock options and stock awards that Defendants represented would increase substantially in value after
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`WeWork went public. However, as described herein, through Defendants’ breaches of fiduciary duty,
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`Defendants caused substantial harm to We, ultimately forcing We to withdraw its IPO and substantially
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`decreasing the value of the equity awards and options held by Plaintiff and the Class, who had worked
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`hard to create value at We.
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`5.
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`The Defendants, however, were treated disparately. Instead of experiencing similar harm
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`to their equity interests, Defendants engaged in self-dealing and protected their own interests to the
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`detriment and expense of the Company’s minority shareholders.
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`6.
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`As noted herein, Defendants Neumann and Softbank have abused their domination and
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`control of The We Company and breached their fiduciary duty as majority and controlling shareholders ,
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`of The We Company by causing harm to the Company and preferring their own interests over those of
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`the Company’s minority shareholders.
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`7.
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`Far from saving WeWork, Softbank is also engaging in self-dealing because it is
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`significantly increasing its stake in the Company at fire—sale prices. It also has a very selfish motive.
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`Earlier this year (in January 2019), Softbank invested more money in WeWork at a valuation of $47
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`billion.
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`It has been reported that a substantial motive of Softbank pulling the plug on the IPO and
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`proposing the present transactions with Neumann was to prevent Softbank from having to take a
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`substantial write-down in the value of its WeWork investment. Because the value of WeWork had
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`reportedly been reduced to less than $10 billion immediately prior to the proposed IPO, the
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`consummation ofthe IPO would have required Softbank to write down the value of its investment by a
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`huge amount, thus reducing the value of its Vision fund, alienating investors in its fund, and making it
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`harder for Softbank and Defendant Masayoshi Son to raise capital from new and existing investors in
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`Softbank’s Vision 11 Fund which is currently being pedaled to well-heeled investors.
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`\DOONQM-hwwy—t
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`NIQNNNNNNNHHb—tr—Ar—Ai—Ap—ar—ar—Ay—amQQM-meHOOOOQONm-bwwr—‘o
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`Shareholder Class Action and Derivative Complaint
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`4
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`p—t
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`\OOO\]O\Ul-l>-UJI\J
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`NNNNNNNNNr—lr—‘t—dr—Ar—lr—dt—II—Ir—lb—l
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`WQONMLUJNHOKOOOQQUI-D-UJNHO
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`8.
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`By this action, Plaintiff seeks damages for the minority shareholders and the Company
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`and also seeks to enjoin the proposed self-dealing transactions with SoftBank that would reward
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`Neumann with $1.7 billion but offer minority shareholders with nothing other than a coercive tender
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`offer to buy back some of their shares at depressed and unfair prices.
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`9.
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`In short, Defendants’ breaches of fiduciary duty caused a significant decrease in the value
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`of We. The harm proved so devastating that We was forced to withdraw its 1P0, which was supposed
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`to be the second largest IPO in 2019 after Uber’s IPO, thus eliminating the liquidity and substantial
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`premium that We’s minority shareholders had been promised. Moreover, due to Neumann’s self—
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`dealing, approximately 2,000 We Company employees stand to be laid off and lose their jobs. It has
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`been reported that the payments Neumann stands to receive if the proposed transactions are
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`consummated will net Neumann $850,000 for each of the 2,000 employees laid off.1 Instead of
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`suffering similar harm to his equity interest in We, however, Defendant Neumann, along with his fellow
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`directors and in concert with SoftBank, conspired to cancel the IPO, pay off Neumann, and increase
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`Softbank’s stake in We, thus further diluting and harming the Company’s minority shareholders.
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`10.
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`The Defendants’ conduct represents a continuing course of conduct. The Board has
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`approved a proposed tender offer from Softbank that will seek to buy back minority shareholders’ stock
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`at $19.19 per share -— far less than fair market value -- while at the same time allowing Softbank to
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`significantly increase its stake in the Company to as much as 80% and procuring for Neumann disparate
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`and wholly unwarranted benefits of $1.7 billion.
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`1 1. Neumann’s conduct is plagued by substantial conflicts of interest, and the Defendants are
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`attempting to prevent the minority public shareholders from realizing fair value for their shares.
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`12.
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`The We Company is headquartered in San Francisco, California and New York, New
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`York. The We Company offers co-working space to freelancers and small startup companies.
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`13.
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`The We Company is a private company. It issues stock to its employees as part of their
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`compensation, and to incentivize them. However, because the stock is not publicly-traded, and The We
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`1 See Rani Molla, “Why WeWork Founder Adam Neumann is Getting $1.7 Billion to Leave the
`Company He Ran into the Ground,” RECODE, Oct. 22, 2019.
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`Shareholder Class Action and Derivative Complaint
`
`5
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`

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`Company does not file its financial statements with the SEC, information about its financial results and
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`the stock’s value is not publicly available, except limited information that was disclosed in connection
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`with a failed IPO attempt.
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`14.
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`In recent years, Neumann, as the Chairman and CEO of the Company, has compounded
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`the informational disparity that exists between the Company and its minority shareholders by failing to
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`hold annual meetings of shareholders, failing to provide minority shareholders with annual reports or
`other financial information, and failing to pay dividends on the stock.
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`15.
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`As a majority and controlling shareholder, Neumann owes fiduciary duties to Plaintiffand
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`other minority shareholders to refrain from engaging in self-dealing and to ensure that minority
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`\OOO\]O\U14>UJI\Jr—t
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`10
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`shareholders are treated fairly.
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`In any transaction in which Neumann derives a personal financial
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`benefit, Neumann’s conduct is subject to the exacting entire fairness standard, pursuant to which
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`Defendants have the burden of demonstrating entire fairness to the minority shareholders, including fair
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`13
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`dealing and fair price. The Individual Defendants owe fiduciary duties to the minority stockholders of
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`the Company. Because the Defendants’ conduct threatens irreparable harm to The We Company’s
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`minority shareholders, Plaintiff seeks declaratory and inj unctive relief as well as damages.
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`16.
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`The members of the Company’s Board are not independent and have abdicated their
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`fiduciary duties. Instead of complying with their fiduciary duties and protecting the Company and its
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`minority shareholders, they have allowed Neumann to benefit himself personally at the expense of the
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`Company and minority shareholders. In addition to the minority shareholders being directly harmed, as
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`alleged herein, the Company has also been harmed.
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`JURISDICTION AND VENUE
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`17.
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`This Court has jurisdiction because the Defendants conduct business in California,
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`including, but not limited to, the conduct here at issue, and because they have sufficient minimum
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`contacts with California to render the exercise ofj urisdiction by the California courts permissible under
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`25
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`traditional notions of fair play and substantial justice.
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`18.
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`Venue is proper in this Court because the conduct at issue took place and has effect in this
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`County. One of the Company’s two headquarters and principal place of business are located in San
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`28
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`Shareholder Class Action and Derivative Complaint
`
`6
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`

`

`Francisco in the Salesforce.com tower. Thousands of WeWork shareholders, who are also employees,
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`stand to lose their jobs in this County-due to Defendants’ wrongdoing.
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`THE PARTIES
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`19.
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`Plaintiff is a current shareholder of The We Company and has continuously owned The
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`We Company stock at all relevant times. Plaintiff is a resident of San Francisco, California.
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`20.
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`Defendant and Nominal Defendant THE WE COMPANY is a Delaware corporation
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`headquartered in San Francisco, California and New York, New York.
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`21. Defendant ADAM NEUMANN is the controlling shareholder ofthe Company. He is a
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`Director of the Company and has been at all relevant times.
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`22.
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`Defendant BRUCE DUNLEVIE (“Dunlevie”) is a founding partner at the San Francisco-
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`based venture capital firm Benchmark. He has been a director ofthe Company at all relevant times, and
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`since 2012. Dunlevie is a resident ofCalifornia.
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`23. Defendant RONALD FISHER (“Fisher”) is a director of the Company and has been a
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`director at all relevant times. Fisher is the Vice—Chairman of Softbank and one of its designees on the
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`We Company Board.
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`24. Defendant LEWIS FRANKFORT (“Frankfort”) is a director of the Company and has
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`been a director at all relevant times.
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`25.
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`Defendant STEVEN LANGMAN~(“Langman”) is a director of the Company and has
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`been a director at all relevant times.
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`26.
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`Defendant MARK SCHWARTZ (“Schwartz”) is a director of the Company and has been
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`a director at all relevant times. Schwartz is a director of Softbank and one of its designees on the We
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`Company Board.
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`27.
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`Defendant JOHN ZHAO (“Zbao”) is a director ofthe Company and has been a director at
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`all relevant times.
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`28. Defendant MASAYOSHI SON (“Son”) is the founder and Chairman of Softbank, and a
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`\DOOQONUI-DUJNr—r
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`.24
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`25
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`26
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`major shareholder of WeWork. Son and Softbank have invested at least $10 billion in The We
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`27
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`Company. Son has called himself and Neumann “partners” in WeWork and has personally negotiated
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`28
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`all
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`the major decisions involving Softbank’s investment
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`in We with Neumann,
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`including the
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`Shareholder Class Action and Derivative Complaint
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`7
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`transactions with Neumann currently being proposed. Son aided and abetted Neumann’s breaches of
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`fiduciary duty as well as the breaches committed by We directors Fisher and Schwartz, who are
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`Softbank’s designees and agents on the We Company Board.
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`29. Defendant SOFTBANK GROUP CORPORATION is a Japanese corporation that is a
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`significant shareholder of the Company. Defendants Fisher and Schwartz are Softbank’s designees to
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`the We Company Board. Softbank owns approximately 29% of the Company’s shares.
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`30.
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`The true names and identities, whether individual, associate or corporate, of the
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`Defendants sued herein as Does 1
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`through 25 inclusive, and the full nature and extent of the
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`participation of the said Doe Defendants in the activities and conduct on which this action is based, are
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`presently unknown to Plaintiff. Plaintiff prays for leave to amend to allege the true names and
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`identities, and the extent of participation in the wrongful activities and conduct, when the same shall
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`become known.
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`CLASS ACTION ALLEGATIONS
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`31.
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`Plaintiff brings this action as a class action, pursuant to California Code of Civil
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`Procedure § 382 on behalf of all minority stockholders of the Company (except the Defendants herein
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`and any person, firm, trust, corporation, or other entity related to, or affiliated with, any of the
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`Defendants and their successors in interest), who are or will be threatened with injury arising from
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`Defendants’ actions as more fully described herein (the “Class”).
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`32.
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`This action is properly maintainable as a class action because:
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`(a)
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`The Class is so numerous thatjoinder of all members is impracticable. There are
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`millions of shares of the Company’s common stock outstanding owned by hundreds, if not thousands,
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`of The We Company stockholders;
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`(b)
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`There are questions of law and fact which are common to the Class including,
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`inter alia, the following: (i) whether the Individual Defendants have breached and are breaching their
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`fiduciary and other common law duties owed by them to Plaintiff and the other members of the Class;
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`(ii) whether Plaintiff and the Class are being provided with all material information regarding their
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`investment in The We Company stock; (iii) whether the Individual Defendants are pursuing a scheme
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`and course of business designed to eliminate the minority stockholders ofthe Company in violation of
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`Shareholder Class Action and Derivative Complaint
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`8
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`their fiduciary duties in order to enrich themselves at the expense and to the detriment of Plaintiff and
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`the other minority stockholders who are members of the Class; and (iv) whether the Class is entitled to
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`declaratory and injunctive relief, as well as damages, as a result of Defendants’ wrongful conduct;
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`(0)
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`Plaintiff is committed to prosecuting this action and has retained competent
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`counsel experienced in litigation of this nature;
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`(d)
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`The claims of Plaintiff are typical of the claims of other members of the Class
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`and Plaintiff has the same interests as the other members of the Class. Plaintiff will fairly and
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`adequately represent the Class;
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`(e)
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`Defendants have acted in a manner which affects Plaintiff and all members ofthe
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`Class alike, thereby making appropriate injunctive relief and/or corresponding declaratory relief with
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`respect to the Class as a whole; and
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`(f)
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`The prosecution of separate actions by individual members of the Class would
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`create a risk of inconsistent or varying adjudications with respect to individual members of the Class
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`which would establish incompatible standards of conduct for Defendants, or adjudications with respect
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`to individual members ofthe Class which would, as a practical matter, be dispositive ofthe interests of
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`other members not parties to the adjudications or substantially impair or impede their ability to protect
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`their interests.
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`DEFENDANTS’ FIDUCIARY DUTIES
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`33.
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`In accordance with their duties of loyalty, care and good faith, the Individual Defendants,
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`as directors of The We Company, are obligated to refrain from:
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`(a)
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`taking any action that adversely affects the value offered to the corporation’s
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`shareholders;
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`(b)
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`(0)
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`participating in any transactions where the directors’ loyalties are divided;
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`participating in any transactions where the directors receive or are entitled to
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`receive a personal financial benefit not equally shared by the minority shareholders of the corporation;
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`and/or
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`shareholders.
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`(d)
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`unjustly enriching themselves at the expense or to the detriment of the minority
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`Shareholder Class Action and Derivative Complaint
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`34.
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`Plaintiff alleges herein that the Individual Defendants and The We Company, separately
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`and together, are violating the fiduciary duties owed to Plaintiff and the other minority shareholders of
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`The We Company, including their duties of loyalty, good faith and independence, insofar as they stand
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`on both sides of the transaction and are engaging in self-dealing and obtaining for themselves personal
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`benefits, including personal financial benefits, not shared equally by Plaintiff or the Class.
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`35.
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`Because the Individual Defendants are breaching and have breached their duties of
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`loyalty, good faith and independence, Defendants’ conduct is subject to the “entire fairness” standard of
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`review and Defendants have the burden of proving the inherent or entire fairness of the challenged
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`transactions.
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`\DOO\]O\UI-I>UJI\J)—a
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`[\J[\JNN[\J[\Jl\.)NNr-Ir—Ar—tl—*)—Ir—tr—Ai—dr—t)—t00\1O\U}JkU.)NHO\O00\l0\UI4;WNP—‘O
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`
`
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`FRAUDULENT CONCEALMENT AND EQUITABLE TOLLING
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`36.
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`During the relevant period, Plaintiff did not discover and could not have discovered,
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`through the exercise of due diligence, Defendants’ breaches of their fiduciary duties or their violations
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`of California law because Defendants did not disclose, and actively concealed, their conduct.
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`37.
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`Plaintiff was unaware of and had no knowledge of Defendants’ unlawful conduct.
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`38.
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`Plaintiff could not have discovered Defendants’ breaches of fiduciary duties and
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`violations oflaw prior to filing suit because Defendants made absolutely no disclosure of their conduct,
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`and failed to provide minority shareholders such as Plaintiff with any annual reports or other
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`information about The We Company during the relevant period.
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`39.
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`Defendants not only failed to disclose any information whatsoever that would have
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`allowed Plaintiff, exercising due diligence, to discover the unlawful conduct, but Defendants also
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`intentionally concealed and attempted to disguise the unlawful conduct to avoid detection by the
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`Company’s minority shareholders.
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`SUBSTANTIVE ALLEGATION S
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`40.
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`The We Company is a controlled private company, with Defendant Neumann owning
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`Class B and Class C shares in the Company that provide him with voting control over all aspects of the
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`Company.
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`41 .
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`The We Company provides co-working space to small companies, freelancers, and others
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`at 528 locations in 111 cities, including 29 countries.
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`Shareholder Class Action and Derivative Complaint
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`42.
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`Neumann and the other directors of the Company owe the Company and its minority
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`shareholders fiduciary duties. Softbank and Son also owe fiduciary duties to minority shareholders
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`because Softbank, in which Son has a substantial equity interest, currently owns 29% of the We
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`Company and thus exercises significant control over the Company, including having two designees on
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`the Board. If the proposed transactions with Softbank are approved, Softbank will gain the right to
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`appoint at least four members to the Board. Thus, Defendants Neumann and Softbank exercise total
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`domination and control over the Board of the We Company and they also own and control at least 90%
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`of the stock in the Company, thus controlling all matters requiring shareholder approval.
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`43.
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`Plaintiff is a minority shareholder in the We Company. Plaintiff was a loyal employee of
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`The We Company, working for 1.5 years for the Company. Due to Plaintiff” 5 hard work and valuable
`contribution to the Company’s success, Plaintiff was awarded stock options and stock in The We
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`Company. Plaintiff currently owns Class A shares of The We Company stock and has owned such
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`stock at all relevant times. Plaintiff was always told that owning stock and/or options in The We
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`Company was a valuable benefit of her employment and that the value of her We Company stock would
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`increase substantially if the Company conducted an IPO, which it intended to do. When Plaintiff
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`voluntarily resigned from the We Company, she was told she had to exercise her stock options or she
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`would lose them. Based on being told that We intended to go public soon and that the value of We
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`stock would increase significantly, Plaintiff exercised her options and bought more We stock. Because
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`of Defendants’ wrongdoing, the value of such stock has been significantly reduced and Plaintiff has
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`been harmed and is threatened with irreparable harm from Defendants’ proposed tender offer and other
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`transactions.
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`44.
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`Because The We Company was and is a private company, not a publicly—traded company,
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`there is no regular or efficient market for the sale of the stock.
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`SELF-DEALING AND BREACHES OF FIDUCIARY DUTY BY NEUMANN
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`45.
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`As the founder of the We Company, Defendant Neumann granted himself huge stock
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`awards in the Company. To ensure his absolute and total control of the We Company, Neumann
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`granted himself over 1,100,000 shares