Man Claims 84% of Facebook, Gets Order Blocking Assets

Cyrus writes "According to a Bloomberg scoop, a New York man claiming to own a majority of Facebook has gotten a signed court order to block Facebook from transferring assets."

That Must Be One Entertaining Contract

[eldavojohn]

Found the complaint on Scribd [scribd.com] and man, judging by the complaints, that sounds like one entertaining contract:

Under Paragraph 3 of the contract, the Seller and Purchaser agreed that for each day after January 1, 2004, the Purchaser would acquire an additional 1% interest in the business, per day, until the website was completed ... Upon information and belief, the website, thefacebook.com, was completed and operational on February 4th, 2004.

Zuckerberg appears to be the Seller and Ceglia appears to be the Purchaser. I know this all happened before "thefacebook.com" had a massive user base but from what I can tell Ceglia dropped a grand to Zuckerberg under some agreement that if the website wasn't finished on a certain date then Ceglia would accrue a point of that business per late day? Is that a standard clause or was this some sort of loan shark that the Z-man found on campus after he stole the ConnectU code?

And then, Ceglia waited past the six year mark for the statute of limitations to run out on a breach of contract in New York? He watched Facebook's rise to popularity past MySpace?

Seriously, what kind of contracts do fledgling websites write? And where do they find people to borrow money from that apparently live under a rock in the Appalachians of New York state? Sure is entertaining one way or the other.

Re:That Must Be One Entertaining Contract

[Anonymous Coward]

The statute of limitations is a red herring -- it only begins to run when a contract breach is discovered (or reasonable should have been), not when the contract is signed. You can have a contract signed 50 years ago, but if you breach it today, the statute of limitations start to run today.

The purported breach was arguably only discovered by the plaintiff due to recent press accounts of potential selling of Facebook or portions thereof. Until some act is taken that indicates an intent to breach, a party to a contract has the right to rely on the expectation that the other party will fulfill his obligations under the contract.

Re:That Must Be One Entertaining Contract

[Skilf]

here is Facebooks reply (from the same user on scribd: http://www.scribd.com/doc/34240120/Ceglia-v-Facebook-Motion-for-Dissolution [scribd.com] snippets:

Defendants Mark Elliot Zuckerberg and Facebook, Inc. (“Facebook”) respectfully submit this memorandum in support of their motion to dissolve the ex parte temporary restraining order (the “TRO”) issued by the Supreme Court of the State of New York, County of Allegany, in this matter. Plaintiff has utterly failed to meet the procedural and substantive requirements for such drastic relief, and the order issued by the state court is similarly flawed and woefully inadequate.

In his Complaint, Plaintiff alleges that, as a result of a two-page contract purportedly entered into more than seven years ago (and approximately nine months before the founding of Facebook), he is entitled to an 84% ownership stake in the Company. (Id. at Ex. A 4, 8).

Re:That Must Be One Entertaining Contract

[Attila Dimedici]

NO, he could very well have known that he owned a big chunk of Facebook. His claim would be that he became aware of Zuckerberg's intention to not honor that ownership claim when he saw "recent press accounts of potential selling of Facebook or portions thereof". Whether or not any of this will hold up in court is another story. However, on the face of it, he has a claim.

Re:Scary

[Anonymous Coward]

WOOSH

Re:Yes, your honor, it *is* on a bar napkin...

[TooMuchToDo]

As long as the napkin has the proper info on it, it can be binding:

http://www.post-gazette.com/regionstate/20001102napkin5.asp [post-gazette.com]

Re:the correct PC phrase is "differently abled"

[Anonymous Coward]

No. [statueoflimitations.us] This is NYC, not Europe! (rtfs)

Re:Scary

[bennomatic]

The last letter isn't a 'c', it's an 'o' that's missing the last 28%. Actually a very clever, opportunistic visual pun, if you ask me.

Re:Facebook's power

[Animats]

I can't remember a firm being seriously damaged through the legal system so soon after establishing itself as a ubiquitous and accepted tool by the establishment.

Read more business history. Ones that come to mind immediately are Lehman Brothers, Barings, Enron, Lloyds of London, and Worldcom. Disputes over ownership and contracts happen all the time.

For more details on the background, see this CNET story. [cbsnews.com]

Re:Not Facebook!

[coaxial]

Are you a professor at Glenn Beck University [cbsnews.com]? You could be! ;)