As Facebook prepares its initial public offering in the stock market later this spring, it’s facing a steady stream of lawsuits from old friends, collaborators and others claiming to have an interest in the social networking site. This type of commercial litigation is fairly common before a company files an IPO. The question is whether the lawsuits are legitimate.
The most recent lawsuit was filed by a man who claims to have been a client of Facebook founder Mark Zuckerberg while he was still a Harvard student. He’s suing for a 50 percent interest in the social networking site in U.S. District Court in Buffalo, New York, based on a contract he signed in 2003. The man says he had a $1,000 interest in the original Facebook site and is now demanding compensation.
Attorneys representing Facebook said the lawsuit claims are false and that the plaintiff actually owed Zuckerberg $10,000 for work the founder did for the plaintiff. Furthermore, the defense attorneys say, the hundreds of emails they’ve released as evidence fail to mention Facebook anywhere, probably because the work concerned a precursor to Facebook with a different name.
Preceding that lawsuit was a much more famous one by identical twin classmates of Zuckerberg, who settled with Facebook and received compensation believed to be in the tens of millions of dollars. The brothers claimed Zuckerberg had stolen their idea of a college networking site to create the wildly popular international site we know and use today. Internet cooperation Yahoo has also sued Facebook, accusing it of infringement of 10 critical patents. Facebook has denied those claims but hasn’t issued an official legal response.
The lawsuits aren’t unexpected given Facebook’s current position. It’s one of the world’s most hotly anticipated IPOs, and any individual or company with a possible interest could file a suit to get a piece of the fortune. But there’s no time like the present: Once all the claims are settled or dismissed, Facebook will have a clean slate as a publicly traded company.
Source: International Business Times, “Facebook IPO: Zuckerberg E-mails Surface In Dispute,” David Zielenziger, March 27, 2012
Subscribe To This Blog’s Feed