Facebook Sued for Massive Majority Ownership Stake
Wow, what an interesting read. Check out this legal action brought against Facebook by web designer, Paul Ceglia. I wonder what will happen to Facebook if Ceglia wins this contract dispute. Article from Information Week:
Facebook Sued For 84% Ownership Stake
Web designer Paul Ceglia says a 2003 contract entitles him to majority ownership of the social networking site.
July 13, 2010 11:43 AM
Facebook has moved to overturn a recent temporary restraining order won by New York web designer Paul Ceglia, who filed suit against Facebook and company CEO Mark Zuckerberg, claiming an April 2003 contract now entitles him to an 84% ownership stake in Facebook.
“We believe this suit is completely frivolous and we will fight it vigorously,” a Facebook spokesman said in a statement. Facebook and Zuckerberg have 30 days to respond, according to court documents.
On July 9, Allegany Court judge Thomas P. Brown; Ceglia’s attorney, Paul Argentieri of Hornell, N.Y.; and Facebook attorney Lisa T. Simpson of New York, spoke via conference call, according to the local newspaper the Wellsville Daily. During that conversation, Judge Brown continued a temporary restraining order that prevents Facebook from transferring assets while the case continues.
Simpson filed a “notice of intent” to move the case away from the U.S. District Court for the Western District of New York in Buffalo, according to the Wellsville Daily.
Under the seven-year-old contract signed by Zuckerberg and Ceglia, the designer received $1,000 and a 50% stake in the site which eventually became Thefacebook.com, according to the suit. The lawsuit also says Ceglia is entitled to “an additional 1% interest in the business for every day after Jan. 1, 2004, until it was completed.”
Terms of the work for hire contract state, “It is agreed that Purchaser [Ceglia] will own a half interest (50%) in the software, programming language, and business interests derived from the expansion of the service to a larger audience.”
In papers filed with the Allegany, N.Y., County Court on June 30, Ceglia seeks a declaratory judgment and relief in the form of monetary damages and 84% ownership — worth between $5.6 billion and $9.24 billion — of the social networking giant, based on Facebook’s estimated value of between $6.5 billion and $11 billion. Zuckerberg’s personal fortune is worth between $4 billion and… (Full Story)