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Illustration: Aïda Amer/Axios

SoftBank and former WeWork CEO Adam Neumann are nearing a detente in their long-running legal battle, as first reported by WSJ and confirmed by Axios.

Why it matters: WeWork isn't a party to the litigation, but having it settled would help smooth the company's post-pandemic path, which is expected to include a second stab at the public markets.

Backstory: SoftBank in the fall of 2019 agreed to buy up to $3 billion of WeWork shares via a tender offer, as part of a broader rescue package in the aftermath of the company's failed IPO. Included was around $970 million for Neumann, who also received nearly $200 million to leave the CEO spot and give up his voting rights.

  • SoftBank bailed on the tender offer last April, arguing that WeWork hadn't met certain closing conditions.
  • SoftBank was then sued by a special committee of WeWork's board, including a representative of venture capital firm Benchmark, who claimed SoftBank just had "buyer's remorse" as COVID-19 took a blowtorch to the co-working market.
  • Neumann subsequently filed his own suit, in case a judge agreed with SoftBank that the special committee didn't have standing.

Fast forward: Sources say that the proposed settlement would apply to both lawsuits, with the $3 billion effectively cut in half.

  • SoftBank would still pay the $20 per share it had originally agreed to pay. The difference is that the number of shares it buys would be cut in around half, meaning the overall tender size shrinks from $3 billion to around $1.5 billion.
  • For Neumann, that means a $480 million payday and he retains around 75% of his current stake in the company. The rest would go to WeWork employees and investors (including Benchmark).
  • Final details are still being ironed out, with a formal announcement expected before the weekend.
  • WeWork is in advanced discussions to go public via a SPAC sponsored by Vivek Ranadivé's Bow Capital Management, per multiple sources. That deal, however, wouldn't be papered until the settlement is signed.
  • "No comments" from WeWork, SoftBank and Neumann.

The bottom line: Given everything that's transpired since SoftBank first agreed to the tender, this feels like a win for all parties.

  • SoftBank de-risks a bit on WeWork and saves itself $1.5 billion upfront. Neumann and other shareholders get paid at pre-pandemic pricing, albeit much lower than the proposed IPO mark, and get to ride any post-pandemic upside. And WeWork itself gets to move on.

Go deeper

Scoop: Fair's Scott Painter raises $30 million for new startup

Illustration: Eniola Odetunde/Axios

NextCar, a startup for car leases and subscriptions formed by TrueCar and Fair founder Scott Painter, has raised about $30 million in seed funding from investors like Reid Hoffmann and Mark Pincus, per an internal email obtained by Axios. The round was led by a private equity firm, according to a source.

Backstory: Shortly before Painter announced his new company in October, Reuters reported that he was exploring ways to buy Fair back from SoftBank Vision Fund and other backers. He resigned as CEO in October 2019.

Editor's note: The story has been updated to clarify that the company provides lease and subscriptions (not rentals).

AT&T spins off WarnerMedia, forming new media behemoth with Discovery

Illustration: Annelise Capossela/Axios

AT&T and Discovery have agreed to create a joint venture that would house WarnerMedia’s premium entertainment, sports and news assets with Discovery's nonfiction and international entertainment and sports businesses, the companies announced Monday.

Why it matters: It's a major course correction by AT&T. The deal essentially confirms shareholder fears that the company's $85 billion merger with Time Warner three years ago was not fully baked.

1 hour ago - Health

Child tax credits from COVID relief plan to begin arriving July 15

Biden arrives in the Rose Garden on May 13. Photo: Alex Wong/Getty Images

The expanded monthly child tax credit introduced in President Biden's $1.9 trillion COVID relief package will begin arriving in parents' bank accounts on July 15, the White House said Monday.

Why it matters: The credit, part of the administration's plan to transform the country's social safety net in the wake of the pandemic, would provide families with $300 monthly cash payments per child up to age 5 and $250 for children ages 6–17.