Winklevi Lose Case Against Facebook
After years of litigation in hopes of scoring a bigger slice of Facebook, Tyler S.H. Winklevoss '04 and Cameron O.H. Winklevoss '04 were told enough is enough on Monday by a 3-judge panel of the Ninth Circuit Court of Appeals. Barring further legal action, the Winklevosses are now forced to accept a deal worth well over $100 million.
The deal was originally worth $65 million, $20 million in cash and $45 million in Facebook stock. Due to the company's growth and increase in valuation since they originally struck the deal, the stock is now worth more than double its original value.
The Winklevosses had claimed that the original agreement was invalid because Facebook lied about its internal valuation of the company.
"The settlement was obtained in violation of the federal securities laws," their lead attorney Jerome B. Falk, Jr. wrote in a statement.
In the decision, Chief Judge Alex Kozinski pointed to the presence of the twins' father in the deal as reason to believe that the twins were well represented during the original negotiation.
"They brought half-a-dozen lawyers to the mediation. Howard Winklevoss—father of Cameron and Tyler, former accounting professor at Wharton School of Business and an expert in valuation—also participated," Kozinsky wrote. "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."
Immediately after the decision was released, Tyler announced via Twitter that his lawyers intend to keep going with the legal battle. If their petition for a rehearing is denied, the only remaining option would be to request that the U.S. Supreme Cout hear the case.
The Winklevosses and Facebook declined to comment on the case.