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Winklevoss twins seek again to re-open Facebook settlement

By Karen Gullo

Bloomberg News

POSTED:
LAST UPDATED: 10:24 a.m. HST, Apr 19, 2011



Cameron and Tyler Winklevoss are seeking review of an April 11 court ruling they lost enforcing a $65 million settlement with Facebook Inc. over their claims that company founder Mark Zuckerberg stole the idea for the social networking site.

A three-judge appeals court panel in San Francisco erred when it rejected the Winklevoss brothers’ claims that the 2008 settlement should be voided because it was procured with fraud, the twins’ attorney said in a court filing today. The brothers want a rehearing before a larger panel of the U.S. Court of Appeals in San Francisco.

The Winkelvosses, former Harvard University classmates of Zuckerberg’s, allege that Facebook didn’t disclose an accurate valuation of its shares before they agreed to the cash and stock settlement. The appeals court ruled that the accord, now worth $100 million more than its original amount, barred any future lawsuits and was “quite favorable” to the twins.

Whether the Winklevosses “would be better off financially keeping the proceeds of the settlement rather than rescinding and proceeding with their lawsuit against Facebook is a personal judgment for them — not an appellate court — to make,” Jerome Falk, their attorney, said in the court filing.

The twins hired Zuckerberg to help build dating website ConnectU Inc. while they were students at Harvard in Cambridge, Massachusetts, in 2003. The Winklevosses and a partner, Divya Narendra, originally accused Zuckerberg in a lawsuit of stealing their idea and delaying the ConnectU project while secretly building Facebook.

Goldman Sachs

The Winklevosses alleged they should have received four times as many shares as the settlement provided. Falk said in January that the 2008 settlement is now worth $100 million more than its original amount after Goldman Sachs Group Inc. invested $450 million in the social networking site, boosting the company’s valuation to $50 billion.

“We appreciate the Ninth Circuit’s careful consideration of this case and are pleased the court ruled in Facebook’s favor,” Andrew Noyes, a Facebook spokesman, said in an e-mailed statement today about last week’s appeals court ruling. The statement didn’t comment on the petition for rehearing.

The case is The Facebook Inc. v. ConnectU Inc., 08-16745, 9th U.S. Court of Appeals for the Ninth Circuit (San Francisco).







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