A former WeWork employee is suing over Adam Neumann's $1.7B golden parachute | Hacker News Reader

A former WeWork employee is suing over Adam Neumann's $1.7B golden parachute

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46 pointsvirtualwhys12 comments

For everyone here defending Adam, I pose this question.

How exactly is capitalism supposed to work when people can use their power to funnel money to themselves from company funds while everyone else who took on equity to work at a startup is fucked?

Is the answer "be more careful next time"? If that's the case, why would people follow the rules of law when someone else is able to fuck over hundreds of people and walk away a billionaire. Why should employees not try and steal from their company when the CEO can do it _and_ get a golden parachute when their behavior destroys the value of the company?

Shareholder equal protection needs to be established more in the courts. It is bogus when some shareholders get massive constructive dividends while others get none.

Perhaps it would be good if all material facts related to a company must be disclosed to all share/option/warrant holders once the number of equity holders or claimed value of the company exceeds a certain threshold. At least an annual balance sheet, income statement, and cap table.

I've found that in practice the legal rights of minority shareholders are often not respected in private companies and there's not a lot that you can do about it.

> it would be good if all material facts related to a company must be disclosed to all share/option/warrant holders

Delaware law gives all shareholders the right to inspect their companies' "books and records" [1].

Recently, private shareholders have had to sue to exercise this right [2]. That's a shame regulators should fix.

[1] https://codes.findlaw.com/de/title-8-corporations/de-code-se...

[2] https://law.justia.com/cases/delaware/supreme-court/2019/281...

Does anybody have any insight as to whether this case has merit or not?

This case has no merit and that court is not the venue to air these grievances.

A more effective idea would be to push for exchanges like Nasdaq to reject listing companies with these share structure attributes.

I know it's fashionable to hate on Adam right now, but without him THERE WOULD BE NO COMPANY TO SUE. People tend to forget that.

Brokej window fallacy!

Without him there would be no WeWork but other less broken companies could have received the same capital, created jobs, etc

Good, then the money could have been put into something where it could be used to create something instead of just enriching some fraud. We don’t need more of these companies, we need good, solid companies that don’t screw people over to enrich some executives.

The same is true for Enron, Worldcom, Lehman Brothers, etc.

Creating a company and raising billions of dollars so you can defraud people is not about creating a company. It is about gaining money at others’ expense.

Do you understand now how your statement is not relevant?

> without him THERE WOULD BE NO COMPANY TO SUE

And with no company to sue, the plaintiff would have had their cash instead of worthless shares they were induced to purchased by a party with better information than she.

Its only “self dealing” when you haven’t granted yourself that right, if the organization type has a constraint from the government or if it doesnt then if the organization type doesnt have bylaws specifically allowing you that right.

WeWork was structured by Adam to give himself that right my mere nature of unilateral control via consolidated ownership and voting rights.

Part of the grievance is that his “self enrichment” torpedoed the IPO, which is not part of reality which is that employees and “minority shareholders” were sold and bought a dream that the market was laughing at the whole time.

WeWork’s structure was always rat infested with a valuation nobody would accept. These payments wouldnt have changed that, its debt load, burn rate and subsidiary structure was the problem.

This case has no merit and that court is not the venue to air these grievances.

I think a more effective idea would be to push for exchanges like Nasdaq to reject listing companies with these share structure attributes.

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