Facebook Officially Closes ConnectU Chapter

Late last night Facebook sent me an email stating that they now consider the ConnectU case closed thanks to a decision handed down by Judge James Ware (download decision). There were a number of findings related to the prior agreement between Facebook and ConnectU. The first is that: In sum, the Court finds that the Agreement reached by the parties does not display on its face a failure to agree or any uncertainty regarding its material terms. Accordingly, the Court finds that the Agreement is enforceable. ConnectU's new lawyers have also asserted that the agreement was procured in fraud because the valuation of Facebook was misrepresented. Apparently, the ConnectU team had what effectively amounts to "buyer's remorse" after they heard of the new valuation of Facebook created by Microsoft's investment in the company. The findings on whether or not Facebook committed fraud: In sum, the Court finds Defendants have failed to establish that Plantiffs made a misrepresentation during the negotiation. The individual signatories to the Agreement are sophisticated business parties who were represented by reputable counsel at the mediation. Either party could have chosen to condition the financial exchange being negotiated on representations and warranties of the value of the stock involved or to conduct their own due diligence with respect to Facebook's valuation. Neither party chose these courses of conduct. [...] Without a showing by Defendants of a material misrepresentation or omission in the negotiations, the Court finds no basis to decline enforcement. Finally, Accordingly, the Court finds that Defendants have failed to tender sufficient evidence of fraud in the circumstances proffered to the Court to create a genuine dispute as to whether the Agreement was fraudulently induced. Ultimately, the court struck down all claims made by ConnectU calling all of the claims unsubstantiated. It's now up to ConnectU to try to find more evidence before a final hearing on July 2nd. At this point Facebook assumes that no more evidence will be submitted and that the ConnectU chapter is now closed. Here is a statement that Facebook released last night: "We are happy that Judge Ware enforced the agreement settling our dispute with the ConnectU founders. ConnectU's founders were represented by six lawyers and a professor at Wharton Business School when they signed the Settlement Agreement. The ConnectU founders understood the deal they made, and we are gratified that the Court rejected their false allegations of fraud. Their challenge was simply a case of â€˜buyers remorse,â€™ as described by the Boston Court earlier this month." "We were disappointed that we had to litigate the settlement, as we believed we were caught in the middle of a fee dispute between ConnectU's founders and its former counsel. Nevertheless, we can now consider this chapter closed and wish the Winklevoss brothers the best of luck in their future endeavors."

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Facebook Officially Closes ConnectU Chapter

Nick O'Neill

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Nick O'Neill