Appeals Court Hears Argument in Winklevoss-Facebook Case

Lora Bentley

What is it about lawsuits that they seem to never die? Really, is it worth all the time and money when they drag on forever? I wouldn't think so, but then I'm not the Winklevoss twins.


The former Harvard students and founders of ConnectU who sued Facebook CEO Mark Zuckerberg for stealing their idea eventually settled for $65 million. But in December, Facebook's response to the Winklevosses' appeal of the settlement became public, and it became clear the brothers were serious about giving up their $65 million for a mere chance at much more.


This week, the appeals court heard an oral argument in the case, but according to The New York Times, the judges seemed quite skeptical. The Winklevosses made two main arguments. The first was that Facebook misled them into thinking the company's shares were worth nearly $36 a piece, when an internal audit had revealed they weren't even worth $9 a piece at the time. As such, they say the settlement should be invalidated.


The New York Times reports that Judge Barry Silverman asked the Winklevosses' attorney why he didn't ask more specific questions about the company's valuation during settlement negotiations, and Judge John Clifford Wallace pointed out that their father, a former Wharton School professor and a valuations expert, had also advised them.


As for the settlement agreement, which the Winklevosses argued should be invalidated because it had been hand-written in less than two pages, Chief Judge Alex Kozinski said simply:

I've seen binding deals in [settlements] a third the size of this one.

Though the actual decision won't come down for a few months, it doesn't look promising for the Winklevoss twins.

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