Tinder Founders' Suit Against IAC and Match Closer to Trial
New York state judge denied companies’ bid to dismiss case.
(Bloomberg) -- A $2 billion lawsuit by a group of Tinder founders, executives and early employees against IAC/InterActiveCorp and Match Group Inc. moved closer to trial as a judge denied a request to dismiss it, even though some of the claims were eliminated.
The half dozen people suing, including co-founder and former Chief Executive Officer Sean Rad, claimed IAC and Match used “false, misleading and incomplete financial information and projections” to create an artificially low valuation of Tinder to avoid paying the group money they’re due under options agreements.
New York State Supreme Court Justice Saliann Scarpulla in Manhattan on Friday threw out claims of unjust enrichment and breach of an implied covenant of good faith and fair dealing -- as well as a merger-related breach of contract claim by two of the plaintiffs. She allowed the rest of the suit, including claims of breach of contract and tortious interference, to go ahead.
``We are pleased by the court's ruling denying IAC/Match's motion to dismiss and paving the way for this case to go to trial,'' Orin Snyder, Rad's lawyer, said in an emailed statement. ``IAC/Match robbed the Tinder founders and early employees and will now be held accountable by a jury.''
The companies have 30 days to respond in court and a hearing is set for Aug. 7.
But after the ruling issued, they made it clear they intend to fight the lawsuit as long as they can.
“This baseless lawsuit has no more merit today than it did a year ago when it was filed,” the companies said in a joint statement. “We’re pleased the court dismissed some of these bogus claims and look forward to defeating the rest of them, both on appeal and in the trial court.”
IAC and Match had argued that Rad had benefited from his decision to exercise his options and sell his stock and couldn’t complain about the money he received. Scarpulla said the companies couldn’t immediately show that Rad had “full knowledge” of everything that took place during the valuation process.
To contact the reporters on this story: Joshua Fineman in New York at jfineman@bloomberg.net;Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider, Peter Jeffrey
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