Interesting Litigation Between eBay and Craigslist12/02/2009 16:24
Two of our favorite online entities, Craigslist and eBay, are going toe-to-toe over an ownership dilution dispute. Both parties are represented by great firms, Perkins Coie for Craigslist, and Cooley Godward Kronish for Ebay, and the case itself will present some interesting story lines. The case stems from Craigslist reducing eBay's ownership interest from 28 to 25% which has a direct impact on controlling interest threshold requirements as well as shareholders and stock options. You can view the complaint here that was filed in 2008.
The complaint alleges that "[Craigslist] engaged in a series of clandestine transactions designed to ensure that eBay would not be able to elect a director, and to either impose new transfer restrictions on eBay or dilute its interests, and to dilute the interests of the employee holders of company stock options."
Next Monday, the dispute will be heard in the Delaware Chancery Court. The expected witness lists include eBay CEO Meg Whitman, founder of Craigslist, Craig Newmark, and Craigslist CEO, James Buckmaster.
This is not an ediscovery case like we usually cover here, but with these digital age parties and firms that we often support involved, it was one we had to bring to your attention.