FaceBook face-off continues

This Kat watched the film The Social Network for the dramatic story of the creation of and ownership claims to FaceBook, the world's most famous social networking site. The film concluded with FaceBook CEO Mark Zuckerberg settling claims in 2008 with twins Cameron and Tyler Winklevoss and with Eduardo Saverin.

Although the film ended (and Academy Awards were collected), the legal wrangling continues. The Winklevoss twins now allege that the settlement which they reached in 2008 with FaceBook should be voided on the basis that it was procured by fraud. In the Federal Courts in San Francisco (California) and in Boston (Massachusetts), they particularly contended that FaceBook and Mr Zuckerberg did not provide an accurate valulation of the company shares before they agreed to settle their claims for US$65 million cash and stocks.

On 11 April 2011, the 9th US Circuit Court in San Francisco (at 4911) found the agreement between the Winklevosses and Facebook barred future lawsuits and was 'quite favorable' to the twins in relation to market activity at the time: The Facebook Inc v ConnectU Inc. The Court concluded (at 4912) with the prophetic words 'At some point, litigation must come to an end. That point has now been reached'.

Despite the forceful position of the lower court, the twins are fighting on. On Monday 13 June 2011, the US Court of Appeals in San Francisco agreed to suspend litigation related to the Winklevosses’ lawsuit until they file a petition with the US Supreme Court to reverse the dismissal of their claims by the 9th US Circuit Court in San Francisco. That means Facebook and Mr Zuckerberg cannot attempt to dismiss the separate lawsuit in the Boston court.

The IPKat thinks that enough is enough. The Winklevoss twins made their agreement in 2008 with the assistance of qualified advisers. They should not be able to avoid an agreement merely because they now want a bigger slice of the pie (or perhaps FaceBook's proposed public float in 2012).

With the parties again firmly entrenched in their positions, Merpel wonders whether someone should line up Aaron Sorkin for The Social Network 2. This one looks like it is set to go on for some time more ...
FaceBook face-off continues FaceBook face-off continues Reviewed by Catherine Lee on Thursday, June 16, 2011 Rating: 5

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