A judge has ruled that a lawsuit filed in 2005 against the MySpace executives who brokered the deal to sell the social networking site to Ruper Murdoch’s News Corp. can finally go forward. The suit accuses former senior executives and directors at Intermix and VantagePoint (a venture capital backer of Intermix) of cheating MySpace shareholders out of billions in revenue by agreeing to a $580 million buyout.
U.S. District Court Federal Judge George King denied the defendants’ motion to dismiss the lawsuit, and the discovery process for the trial is expected to more forward shortly. The suit names former Intermix CEO Richard Rosenblatt and former President Brett Brewer, along with VantagePoint.
The suit is being championed by Brad Greenspan, MySpace founder and former chairman of eUniverse (which was renamed Intermix), who says he was bidding against News Corp. to buy the rest of Intermix, but his offer was voted down by the board. However, Greenspan is careful to note he is merely a member of the class represented in the current lawsuit, and is not a client of the law firm managing the suit, Coughlin, Stoia, Geller, Rudman, & Robbins, LLP.
“It has been three years since I worked around the clock pleading with other MySpace/Intermix shareholders to vote against the sale of MySpace to News Corporation in 2005,” Greenspan said in astatement. “I knew that the value of the company was billions of dollars, however the deceptive practice of hiding MySpace financials by Intermix management robbed shareholders of their opportunityto adequately gauge the company’s value.”
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