Contributed by: ElyseRomano Friday, November 08 2019 @ 09:58 am
A New York state appeals court unanimously rejected IAC/InterActiveCorp’s motion to dismiss the lawsuit filed by Tinder founders and early employees who say IAC undervalued Tinder to avoid paying them billions of dollars. This decision affirms a June 13 ruling in which New York State Supreme Court Justice Saliann Scarpulla also rejected a motion to dismiss the litigation.
The lawsuit alleges that IAC and Match Group cheated the plaintiffs out of money they were owed by improperly undervaluing Tinder, which today is worth more than $20 billion, and converting their company stock options. The appeals court denied IAC’s motion to dismiss on statute-of-limitations and other grounds, and said that the plaintiffs “were not bound under their stock options agreements to what they considered artificially low valuations of their stakes.”
In a statement, the five-judge panel said: “Although the parties agreed that the value of their stock options would be determined by the valuation process, nothing in the agreements provided that the valuation would be binding or final or that the parties would be precluded from fully disputing the valuation in court.”
IAC’s motion to dismiss the lawsuit claimed plaintiff and Tinder co-founder Sean Rad “fully participated in the valuation process” of Tinder, and called the lawsuit a belated and improper attack on a “binding expert appraisal” conducted 13 months prior.
“This baseless lawsuit has no more merit today than it did over a year ago when it was filed,” IAC said in a statement at the time. “We look forward to defending ourselves in court.”
Following this ruling from the New York state appeals court, the lawsuit seeking $2 billion in damages for Rad and his fellow plaintiffs can continue to proceed to trial. A jury trial is scheduled for 2020.
Orin Snyder, attorney for the Tinder plaintiffs, said: “IAC and Match cheated our clients and engaged in a brazen cover-up. We are pleased that the appellate court unanimously upheld the trial court’s decision and rejected IAC’s latest maneuver to avoid a trial. The evidence of IAC’s lawless behavior is mounting. We look forward to presenting it to the jury.”
Meanwhile, Rad has filed his own motion to dismiss one of two lawsuits brought against him by IAC and Match Group. The first, filed in January, alleges that Rad secretly copied files and other proprietary information. The second, filed in September, accuses him of having recorded conversations with his superiors without their consent. Rad is seeking to dismiss the January lawsuit.