A recent move in the case of FanDuel‘s founders had a big impact. The case involves former CEO Nigel Eccles, along with dozens of the company’s early investors and ordinary shareholders.
They are up against an allegedly conflicted board and private equity investors. These investors are accused of intentionally eliminating these common shareholders in a 2018 merger with Paddy Power Betfair (PPB).
Plaintiffs have until Nov. 14 to oppose the Sept. 16 motion seeking to dismiss the expanded complaint.
Shamrock Capital Advisors, Kohlberg Kravis Roberts & Co. (KKR) and former board members have named former FanDuel CFO and current CEO Matt King. He faces a separate charge of fraud in the expanded complaint.
Defendants’ attorneys, in dismissing causes of action including breach of fiduciary duty, conspiracy, breach of contract, and fraud, among others, wrote: “Plaintiffs’ new allegations and recently cited discovery documents lift the curtain on this case , exposing that their demands are, and always have been, empty.”
Case under Scottish law
The defendants also wrote that, “Nigel Eccles, lead plaintiff, mismanaged FanDuel Ltd to rock bottom. Then, the defendant directors intervened.” They pursued an acquisition that the plaintiffs facilitated and accepted the highest offer available. In fact, this was the only lifeline that could prevent the collapse of FanDuel Ltd.”
Apart from the single claim against King individually, the case falls under Scots law. Previous activity in the case determined that the relevant actions and events occurred in Scotland, where FanDuel was headquartered.
Finally, the authors filed their second complaint on August 8. This followed a favorable ruling in May from the New York State Court of Appeals, which found that the plaintiffs had made a valid claim that the director defendants were in default of a fiduciary duty to shareholders.
