Tuesday, January 11, 2011
Winklevoss twins want settlement with Facebook, Mark Zuckerberg undone
The Winklevoss twins' beef with Mark Zuckerberg and Facebook isn't quite over yet.
In 2008, Palo Alto-based Facebook agreed to a settlement with brothers Cameron and Tyler Winklevoss, and their business partner, Divya Narendra, which resolved claims that Zuckerberg stole the idea for his social-networking website from the brothers. All four were previously Harvard classmates.
Now, the Winklevoss twins and Narendra, and their lawyers, are working to eradicate the settlement.
On Tuesday, lawyers for the Winklevoss brothers and Narendra asked a three-judge panel of the U.S. 9th Circuit Court of Appeals in San Francisco to void the settlement based on the argument that Facebook didn't give an accurate valuation of its shares before agreeing to pay the brothers $65 million in stock and cash, according to a report from Bloomberg on the hearing.
The dispute between the Winklevoss twins, Narendra and Zuckerberg was depicted in the 2010 film "The Social Network," about Facebook's founding and rise to being the most popular social-media website on the planet.
In the film, both Winklevoss brothers were played by Armie Hammer, the great-grandson of oil tycoon and philanthropist Armand Hammer.
Jerome Falk, a partner at the law firm Howard Rice Nemerovski Canady Falk and Rabkin in San Francisco, which is representing the Winklevoss and Narendra, told Bloomberg that lawyers on both sides made errors in the 2008 settlement.
"The mistake was entering into a transaction with business issues that needed to be addressed and weren't," Falk told Bloomberg. "They ended up with an agreement that's vulnerable to the attack we're making on it."
The lawyer told Bloomberg that the 2008 settlement is now worth about $100 million more than its original amount after Goldman Sachs Group Inc. invested $450 million in the social-networking site.
Facebook is arguing that the agreement should be not be voided and that the Winklevoss twins have a "bout of settler's remorse," Bloomberg reported.