Facebook Inc. and its co-founder Mark Zuckerberg admitted some factual allegations in a lawsuit by a western New York man who says a 2003 contract entitles him to half of Zuckerberg’s Facebook holdings, while calling the case as a whole “a fraud on the court.”
In an answer filed today in federal court in Buffalo, Facebook and Zuckerberg admitted that the two men met in the lobby of a Boston hotel in April 2003 and that Zuckerberg, then a Harvard University student, signed a contract with Ceglia to work on StreetFax.com, a company Ceglia was trying to start at the time, after answering an online job posting.
Facebook and Zuckerberg today denied the principal allegations of the suit, claiming that Ceglia’s claims are based on a doctored contract and fabricated e-mails. The contract Zuckerberg signed had nothing to do with Facebook, they said.
In an amended complaint filed last month, Ceglia quoted from e-mails he claimed he exchanged with Zuckerberg, which he said support his claim that the two men formed a partnership that gave Ceglia half-ownership of Facebook when it was launched in 2004.
Ceglia claims Zuckerberg defrauded him by lying about the early success of “The Face Book” at Harvard. Ceglia said he is entitled to a multi-billion-dollar stake in Facebook, a closely held company valued at as much as $55 billion, according to Sharespost.com, an online marketplace for investment in companies that aren’t publicly traded. Palo Alto, California- based Facebook runs the world’s biggest social-networking site.
‘Utterly Silent’
“The purported contract was signed in 2003, yet plaintiff waited until 2010 to file this action -- a seven-year delay during which plaintiff remained utterly silent while Facebook grew into one of the world’s best-known companies,” the company said in its answer today.In an interview in July, Ceglia said he found the contract while looking through old files to find assets to pay back disappointed clients of his wood-pellet business. The business, Allegany Pellets, was shut down in 2009 by state authorities after customers complained they didn’t receive the pellets they had ordered.
Robert Brownlie, a lawyer for Ceglia, didn’t return a phone message seeking comment.
The case is Ceglia v. Zuckerberg, 1:10-cv-00569, U.S. District Court, Western District of New York (Buffalo).
Source: www.bloomberg.com
