In a civil lawsuit filed in the Supreme Court of New York’s Allegany County last month, Ceglia vs. Zuckerberg & Facebook, , Paul Ceglia said he signed a contract with Facebook co-founder Mark Zuckerberg in 2003 to develop and design a website called TheFacebook.com (I like the sound of that better).
A New York judge’s recently granted an temporary order blocking any transfer of the company’s assets, based on Paul Cegliaas clain that he owns 84% of Facebook
According to Ceglia he signed a contract with Zuckerberg to develop TheFacebook.com, (Facebook.com owns this domain as well) for a $1,000 fee and a 50% stake in the company.
The lawsuit says the contract also stipulated that Ceglia “would acquire an additional 1% interest in the business, per day, until the website was completed,” and the suit said that by February 4, 2004, Ceglia’s stake in Facebook totaled 84%.
Mr. Zuckerberg currently owns a 24% stake in Facebook and is the company’s CEO and president.
Facebook called the suit completely frivolous.
The company said the case has been moved to federal court, where Facebook has asked that Allegany Court Judge Thomas Brown’s recent order restricting the transfer of Facebook assets be struck down.
“The order will not affect our ability to do business but we do not believe it is legally supported and we have moved to have it vacated,” said Facebook’s Barry Schnitt.
Ceglia’s suit contends the contract with Zuckerberg was dated April 2003. Some of the previous accounts of Facebook’s history have said that Zuckerberg was at work on other projects during that period and did not come up with the idea for Facebook until later. The Internet domain name for “TheFacebook.com” was registered in January 2004, according to Network Solutions.
Currently there is a fund of $15,000,000 being put together through SharesPost.com to acquire shares of Facebook at $60 a share, which would place the value of the company at $24 Billion. (However there has been shares of the company bought for as high as $70 on Sharespost.com)
If Ceglia suit prevails his share would therefore be worth about $20 Billion, certainly a nice payday for a web developer.
A: why not?
“According to Ceglia he signed a contract with Zuckerberg to develop TheFacebook.com, (Facebook.com owns this domain as well) for a $1,000 fee and a 50% stake in the company.
The lawsuit says the contract also stipulated that Ceglia “would acquire an additional 1% interest in the business, per day, until the website was completed,” and the suit said that by February 4, 2004, Ceglia’s stake in Facebook totaled 84%.”
That doesn’t sound right.
Hi Mike,
1. Who owned the domain name THEFACEBOOK.COM back in 2002?
2. Ceglia filed the case in civil court, It would seem for the lower costs. Facebook moved the case to Federal court. That tactic is normally litigious maneuver used to place more of a monetary burden on the plaintiff.
3. Ceglia has let over six years pass before making a claim. It would appear that maybe he lacked the funds to pick a fight and therefore went with civil court.
4. For Ceglia’s sake I hope he had this “contract” witnessed and stamped by a notary public back in 2003.
5. If Ceglia fails with his suit, now that it has been strategically moved to Federal court, he could be held responsible to pay attorney’s fees and potential damages.
If he signed a contract like that then that was very foolish.
What horrible terms!
This is a crazy sounding contract. An extra 1% a day until the site is finished? He should have taken 50 days to complete it, then he’d have 100%. Usually there is a bonus for finishing early for the developer not a punishment. The longer he takes the better for the developer and the worse for the buyer. Not only more expensive but the buyer had to wait longer for the site. This makes no sense.
Secondly, if I was a guy who had a clear contract stating I owned 84% of FaceBook, I think I would have filed that suit a long time ago. Why now? Was he good on money until just now so he pulled that old contract out of the attic to try to fix his bank account. Makes no sense.
it’s strange that, with this contract, Ceglia hasn’t finished the site in… 50 days… 🙂
souldn’t read web-designer in the title.?
regards
.
84% of the $15 billion Facebook value is… %12.6 billion… not bad for 34 days of work… 🙂
This guy might get a decent behind the scenes payday for simply causing a ruckus and delaying the buying/selling of shares. ($24B valuation?!?! Sheesh!)
They will just pay him off to shut him up
A judge lifted the injunction against Facebook today
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=132110&nid=116698
” The document also says that Ceglia would obtain a 50% ownership in the software and the “business interests derived from the expansion of that service to a larger audience,” with additional percentage points if the software was delivered late.”
Again, this just does not make any sense.
“Questions also are swirling about Ceglia’s credibility. He and his wife reportedly were arrested last year for grand larceny in connection with their business, Allegany Pellets, according to the Wellsville Daily. They allegedly took $200,000 worth of orders for wood pellets that they never delivered.”
Why am I not suprised?
UPDATE
New development
http://www.informationweek.com/news/services/data/showArticle.jhtml?articleID=226700420&subSection=All+Stories