Palantir Must Turn Over Internal Files to Unhappy Investor
(Bloomberg) -- Secretive data-analytics company Palantir Technologies Inc. must turn over internal files to one its early investors who accuses the firm of improperly blocking his efforts to sell his shares.
Marc Abramowitz, a managing member of KT4 Partners LLC, properly sought the confidential information about Palantir’s inner workings and must get access, Delaware Chancery Court Judge Joseph Slights said Thursday.
Abramowitz showed he had a “proper purpose’’ for demanding access to the files to aid his investigation of “potential wrongdoing’’ within Palantir, Slights ruled. The order doesn’t specify how quickly Palantir must make the records available.
Abramowitz countered by suing in Delaware to seek access to files to bolster his claims that Palantir officials sabotaged his efforts to sell his $60 million stake to a Chinese company and failed to hold annual shareholder meetings. The investor also sued over the stymied stock sale itself.
“Palantir is pleased by the outcome of this order, which denies Abramowitz’s unjustified requests beyond limited company disclosures,’’ Lisa Gordon, a company spokeswoman, said in an email. “The company will continue to pursue its existing legal action against him for theft of Palantir’s intellectual property.’’
Slights said “Palantir’s serial failure to convene annual stockholder meetings is problematic’’ because it raises questions about whether shareholders are getting information about the private firm’s operations.
Abramowitz, a lawyer and one of Palantir’s seed investors, also can get documents about whether the data-miner’s executives failed to honor shareholders’ stock-sale rights and details on share sales by company insiders, Slights concluded. The judge rejected the investor’s request for access to other documents, such as files on Palantir executives’ compensation, according to court filings.
Founded in 2004 by billionaire Peter Thiel and others, Palantir is among Silicon Valley’s most highly valued companies. In addition to KT4 Partners, an early investor was the venture-capital arm of the U.S. Central Intelligence Agency, and the firm has counted the National Security Agency and FBI among its clients.
Palantir’s customers include government spy agencies around the world. It was most recently valued at $20 billion by investors and is well-positioned to cash in on more government work, with Thiel being a staunch supporter of President Donald Trump.
The Delaware case is KT4 Partners v. Palantir Technologies, 2017-0177, Delaware Court of Chancery. The California case is Palantir Technologies v. Abramowitz, 16CV299476, California Superior Court, Santa Clara County (San Jose).
©2018 Bloomberg L.P.