Cooley Client eBay Victorious in Shareholder Dispute with Craigslist
Court's Ruling Reinstates eBay's Minority Share in Craigslist
Partner Michael Rhodes was lead trial counsel for eBay Inc.
San Jose, Calif. – Sept. 9 2010 – eBay Inc. said today that Chancellor William B. Chandler III of the Delaware Court of Chancery ruled in the company's favor in a shareholder suit filed against Craigslist, and its majority shareholders Jim Buckmaster and Craig Newmark. The ruling overturns a series of unlawful transactions undertaken by Craigslist's majority shareholders to dilute eBay's minority share in the company. The ruling rescinds a poison pill and right of first refusal adopted by the controlling shareholders in January 2008 and restores eBay's 28.4 percent share in Craigslist.
In his opinion, Chancellor Chandler found that "Jim and Craig breached their fiduciary duty of loyalty by using their power as directors and controlling stockholders to implement an interested transaction that was not entirely fair to eBay, the minority stockholder."
"We are very pleased that the Court gave eBay what it sought from the lawsuit," said Michael R. Jacobson, eBay general counsel. "eBay brought this suit to protect its own shareholders and preserve its valuable investment in Craigslist. The evidence presented at trial demonstrated that the actions were taken by Mr. Buckmaster and Mr. Newmark to benefit themselves at the expense of eBay, and we are gratified that the Court recognized these actions were both unfair and unlawful and rectified the situation."
eBay is represented in this case by Michael Rhodes of Cooley LLP and William Lafferty of Morris Nichols Arsht & Tunnell LLP.
About eBay Inc.
Founded in 1995 in San Jose, Calif., eBay Inc. (NASDAQ:EBAY) connects millions of buyers and sellers globally on a daily basis through eBay, the world's largest online marketplace, and PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments. We also reach millions through specialized marketplaces such as StubHub, the world's largest ticket marketplace, and eBay Classifieds sites, which together have a presence in more than 1,000 cities around the world. For more information about the company and our global portfolio of online brands, visit www.ebayinc.com.