WeWork Hit With Challenge to Poison Pill, Board Liability Shield

An investor sued WeWork Inc. in Delaware, claiming the company’s board gave itself an illegally broad liability shield when it recently adopted measures aimed at blocking a hostile takeover.

The lawsuit, targeting the coworking space company and its 10-member board, challenges a “stockholder rights plan” that took effect April 7, with a one-year sunset clause. WeWork has said the purpose of the so-called poison pill was to protect valuable tax assets—net operating loss carryforwards—from structural threats posed by a potential ownership change.

The company declined to comment on the allegations through a spokesperson.

The case is the latest in Delaware’s ...