Mark Zuckerberg and his 800 pound Gorilla, Facebook, are in some big legal trouble. One of Zuckerberg’s early angel investors, Paul Ceglia, has sued the social network and its founder for 84% ownership. Seriously?
In 2003, Paul Ceglia invested $1000 into “The Facebook” for a 50% stake in Zuckerberg’s business. In the two page agreement, in exchange for the investment, Zuckerberg agreed to have the website running by January 1, 2004. If Zuckerberg didn’t get the website running by that time, he would have to pay Ceglia an additional 1% for each day it was late. Reportedly the site did not launch until February 4th, so Ceglia thinks he now owns 84% of the company. Who wrote this crap agreement? The agreement, posted on Scribd.com features the original contract signed between Paul Ceglia and Mark Zuckerberg.
In papers filed with the Allegany, N.Y., County Court on June 30, Ceglia seeks a declaratory judgment and relief in the form of monetary damages and 84% ownership — worth between $5.6 billion and $9.24 billion — of the social networking giant, based on Facebook’s estimated value of between $6.5 billion and $11 billion. Zuckerberg’s personal fortune is worth between $4 billion and $5 billion, according to published reports.
After registering thefacebook.com domain in January 2004, Zuckerberg launched TheFacebook site a month later. In August 2005, the site officially became Facebook.com after the URL was purchased for $200,000, and 13 months later it expanded beyond educational institutions into a more general audience, accepting anyone older than 13 with a legitimate e-mail address.
It’s weird that it took Paul Ceglia so long to file a lawsuit. He’s even won a temporary restraining order against Facebook and they are not allowed to move any assets until the next court hearing. Wowza!
Facebook and Mark Zuckerberg claim the lawsuit is frivolous and will fight Paul Ceglia vigorously. Of course they will. Chances are they will negotiate an out of court settlement and Astrochicks predicts soon Paul Ceglia will be a zillionaire. Amazing.