Tinder Co-Founder’s Lawsuit Against IAC Moves Closer To Trial After Motion To Dismiss Is Denied

  • Thursday, July 11 2019 @ 07:49 am
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The dating industry’s trial of the century is one step closer to taking place. Tinder co-founder Sean Rad’s $2 billion lawsuit against the dating app’s parent company, IAC, can move forward after a New York Supreme Court judge rejected IAC’s motion to dismiss the case. Rad and his co-plaintiffs may pursue their allegations that IAC purposely undervalued Tinder to avoid paying out billions of dollars in stock options to the dating app’s original team.

“We are pleased by the court's ruling denying IAC/Match's motion to dismiss and paving the way for this case to go to trial,'' Orin Snyder, Rad's lawyer, said in a statement. “IAC/Match robbed the Tinder founders and early employees and will now be held accountable by a jury for their multi-billion dollar scheme.”

Justine Sacco, a spokesperson for Match Group, also issued a statement: “This baseless lawsuit has no more merit today than it did a year ago when it was filed. We’re pleased the court dismissed some of these bogus claims and look forward to defeating the rest of them, both on appeal and in the trial court.”

Rad and nine other plaintiffs originally filed suit against IAC in August 2018, claiming the company intentionally undervalued Tinder at $3 billion in July 2017 to prevent Rad from accessing the full value of his stock options. The lawsuit alleges that IAC created “a false picture of Tinder’s financial condition and prospects” resulting in “bogus numbers” that “stole billions of dollars from the Tinder employees.”

One of the plaintiffs, former Tinder VP of Communications Rosette Pambakian, also claimed that IAC/Match Group executive Greg Blatt sexually harassed her at a company party. The lawsuit states that Match executives did nothing when Blatt was reported for his behavior, likely because he was a key player in the plot to downplay Tinder’s valuation. Pambakian and three other plaintiffs withdrew from the lawsuit when a forced arbitration contract clause surfaced in late 2018.

In the most recent ruling, New York State Supreme Court Justice Saliann Scarpulla rejected IAC’s claim that too much time had elapsed between this lawsuit and the initial Tinder valuation. The remaining plaintiffs will be allowed to pursue punitive damages and benefits from promised future valuation events that never occurred because Tinder was merged into Match Group.

The companies have 30 days to respond in court. The next hearing will take place on August 7.