What are your thoughts about this one?
SoftBank reasons are:
- the corona virus pandemic has impacted their business their business
- WeWork is under criminal investigation and that's why they have distance themselves.
Do you think that is is a valid reason? Does WeWork has the chance to win or settle this out of court and they proceeded with the lawsuit?
The whole global financial markets has change since the covid-19 outbreak. So I'm guessing that Softbank was really hit hard by it that's why they decided to back up at the last minute because of the circumstances. I'm not sure if this is just verbal or have written agreement to start with. If there is a written agreement then it the game chances. We still have to see the lawsuit first, but I will assume that this will be settled out of court as not to drag this case for months or years that will have an impact on the two companies.
True, that's what I really thought in the beginning, but is this an excuse from backing out of the partnership? Or are there more compelling reasons?
When you open a business, lawsuit are a common thing. There are terms and conditions on every deal and if you violate it, you are going to get sued.
But companies generally do violate these rules as the outcome would be more favorable or cheaper than going with the original deal. Softbank ofcourse would have reasons to do so. And a company does so generally with a support of the standing board.
I disagree though, every business partnership entered have the goal to make profit for the two. And there are also protections in place if ever the partnership is dissolved. However, in this case they even hasn't started anything yet. Yes, it could be settled out of court as I have said, but I think there are more deeper reasons in dissolving the partnership, iMHO.
