Winklevoss Loss, Facebook Win: Landmark Case

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“At some point, litigation must come to an end,” a US Court declared yesterday. “That point has now been reached.”

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Tyler and Cameron Winklevoss have just had their latest case against the social network thrown out, with a US court telling them they cannot back out of their earlier settlement.

This comes on the back of an earlier multimillion dollar deal agreed with Facebook founder & CEO Mark Zuckerberg, worth  $20m in cash, not to mention the $45 million worth of stocks in the company, now valued at billions.

However, despite agreeing to settle at the time, clearly it wasn’t enough for the former Harvard students.

This also sets an important legal precedent for parties looking to renege on settlements made.

“For whatever reason, they now want to back out.” “Like the district court, we see no basis for allowing them to do so,” the ninth US Circuit Court of Appeals said in its deliberation in the US, Monday.

Facebook has welcomed the ruling. The deal, when agreed by the parties, was favourable “in light of recent market activity,” the judges said.

The claims by the twin brothers, that Mark Zuckerberg, stole their idea and coding for a social networking site, called ConnectU, played out in last year’s hit movie The Social Network.

Zuckerberg then failed to make them partners to the business, once the network was up and running, it had been claimed.

 

The brothers, in this latest case, accuse the Facebook chief of attempting to pull one over on them again in thrashing out a settlement, failing to reveal stocks issued to employees were worth $9, which would have led them to gaining a far greater share windfall, if disclosed.

This theory was based on the recent transaction with Microsoft, which had pushed stock values to $35 and total Facebook value at $15bn.

“This case is about whether sophisticated parties surrounded by a platoon of world-class lawyers can cancel a deal that is binding,” Joshua Rosenkranz, lawyer for Facebook argued in the case.

“No one was misled here,” he said. “The ConnectU founders struck a deal that made them very rich and is making them richer by the day. No one made them sign it.”

“The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace,” according to judge’s deliberation.

A three panel judge heard the case in January.

 

The Winklevosses attorney has rejected the ruling and said he would seek a rehearing.

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