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Zuckerberg admits working for man claiming Facebook ownership

theregister.co.uk

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Re: Zuckerberg admits working for man claiming Facebook ownership

#61

Post by nomurrcy »

grellas wrote: post #17

The nature this case in relation to how it is being reported fascinates me. Let me summarize while making a few observations: 1. A guy comes out of nowhere and files a lawsuit in a state court in Allegany County, New York (population: about 50,000 - http://quickfacts.census.gov/qfd/states/36/36003.html ). 2. The lawsuit is filed on June 30, 2010 and consists of a grand total of 2 pages of allegations, coupled with a…

Some responses (these all assume that this whole contract is not a forgery, and Mr. Zuckerberg entered into it knowingly)

a) It seems to me that the work to be performed is adequately spelled out and vagueness is not an issue. (even by name 'The Facebook') I'd be inclined to agree with you if Mr Ceglia hired Mr. Zuckerberg to develop something totally unrelated and then claimed ownership over a product developed later, but there seems to be little question that the site started there @ Harvard morphed over time into the Facebook we know today.

b) I don't see how this penalty is unenforceable. There is a good chance the whole venture was viewed to be worth 1000->2000 at the time of the contract. Not only was Zuckerberg content to sign this contract, he was sufficiently disinterested in maintaining 50% ownership at the time that he took an additional 34 days to finish the project. A contract isn't invalid just because, years later, it seems one of the parties agreed to a bad deal. At the time, the deal probably seemed quite fair.

c) As far as I know, in America - unlike England - the clock on the statute of limitations starts upon discovery of the breach by Mr. Ceglia. It is very easy for him to claim that he didn't discover a breach until 2005 or 2006.

As an additional point, I believe there is no way the claimant will be able to claw back equity from those who have received it without knowledge of Mr. Zuckerberg's breach. I can't be certain about NYC but in almost all states they are protected. (You seem to know what you are talking about so perhaps you could clarify this?)

I don't understand what is weird about this claim. There is a word for a perpetual stake in a business: Equity. Majority equity holders choose how or when to dilute their stake. Ceglia gave Zuckerberg $1000 and he got equity in return. If I run a lemonade stand and you buy half for a grand and eventually I grow it into a lemonade empire, I don't get to divest you of your stake just because I agreed to a bad deal. I agree the suit is poorly put together, but I don't see anything at all weird about the claims.

Re: Zuckerberg admits working for man claiming Facebook ownership

#62

Post by kenjackson »

apsurd wrote: post #28
defen wrote: post #16

Earlier quoted context omitted.

$1000 of weed/beer in exchange for 50% of a worthless venture probably sounded ok at the time.

No, that's still a stupid proposition. Most Harvard students are presumbly pretty damned well off in the first place. Also, now that we've seen Zuck after the fact, you can't deny he is reasonably intelligent. Seems like a completely non-standard move imo. Even though I surely could use the money I'm way too arrogant to give up 50% of something I'm working on. I think the entire planet knows how arrogant Zuck is (not…

If I was 19 yo I'm not so sure I wouldn't give up 50% of a company for $1k. Remember, at age 19, you haven't actually created anything of value. This $1k seems like a free computer at the time. And in the off chance this company does well, 50% of $1B is $500M. I'm happy to just have my $500M. Or at least I would be at the time I'm hypothesizing about this company.

Of course, Mark wouldn't take that deal now if he started a new company. But I bet you can still find a relatively bright student somewhere who would.

Re: Zuckerberg admits working for man claiming Facebook ownership

#64

Post by Scott_MacGregor »

grellas wrote: post #58
greendestiny wrote: post #40

Earlier quoted context omitted.

Well I'm not a lawyer, but from a complete laymans point of view I'm not sure I agree with all your points. I don't expect my opinion to be worth a lot to anyone, but I still think there are a lot of questions I'd want answered if I was financially invested in facebook. Firstly the contract is only a couple of pages long and the point about owning 50% of thefacebook is right there in the first paragraph. It might see…

I leave it to New York lawyers to get into the fine points of the contract law here but I would add this to my earlier comments: 1. This contract is outrageous and unconscionable - not one founder among the thousands I have worked with over 25 years in Silicon Valley would even begin to consider giving away half or more of his company (much less 84%) for a $1K investment. If I tried to do this as a lawyer in a client…

As far as "point 1" is concerned, in our industry it really does seem "outrageous and unconscionable", but as far as case law is concerned I wonder if in the grand scope of new businesses in general it would be viewed as such. The court may be predisposed to believe that people and businesses have freedom to contract, and it seems reasonable to believe that the argument could be made that this clause should be left to stand as written.

New York may have been chosen as venue in order to "fit" with known case law on this and other points. Such as the allegation in paragraph 3 that Facebook is a "domestic corporation" in New York (a very basic detail to get wrong about this) seems like it might be an "error-on-purpose" to lay the foundation for using a particular case, either now or later. Sloppy errors do happen, so does venue shopping, and with a case that has this big of a potential payoff, feigned errors on the part of counsel might allow introduction of some "hoped for" piece of a supporting case. It is New York after all.

Re: Zuckerberg admits working for man claiming Facebook ownership

#66

Post by greendestiny »

grellas wrote: post #58
greendestiny wrote: post #40

Earlier quoted context omitted.

Well I'm not a lawyer, but from a complete laymans point of view I'm not sure I agree with all your points. I don't expect my opinion to be worth a lot to anyone, but I still think there are a lot of questions I'd want answered if I was financially invested in facebook. Firstly the contract is only a couple of pages long and the point about owning 50% of thefacebook is right there in the first paragraph. It might see…

I leave it to New York lawyers to get into the fine points of the contract law here but I would add this to my earlier comments: 1. This contract is outrageous and unconscionable - not one founder among the thousands I have worked with over 25 years in Silicon Valley would even begin to consider giving away half or more of his company (much less 84%) for a $1K investment. If I tried to do this as a lawyer in a client…

Ok thanks for that, I would certainly agree that I don't know any founders who sell (at least) 50% of their company at any stage for $1000. Also the way its in a contract about some other software delivery is bizarre. My post was taking a very generous view of Mr Ceglia's claims (and no doubt completely wrong about the law) and assuming that Mr Zuckerberg had knowingly signed the contract. It still makes me wonder if this isn't all some kind of forgery.

Re: Zuckerberg admits working for man claiming Facebook ownership

#67

Post by stretchwithme »

dhyasama wrote: post #60
stretchwithme wrote: post #37

I hate these leeches. "Yeah, I hired him to shovel the driveway, and you didn't do the sidewalk behind the garage, so I own your house now."

I hate people that agree to one thing and then do another if it isn't what they want later on. "Yeah, I hired him to shovel my driveway. He said he invented a new shovel called "The Shovel" and needed money to sell it. I invested with him and now he says his new shovel, called "Shovel", is unrelated."

my comments may have been premature
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