The NY Supreme Court ruled to lift the stay on discovery in an ongoing lawsuit brought by FanDuel co-founder Nigel Eccles and other plaintiffs.
The New York Supreme Court ruled to lift the stay on discovery in an ongoing lawsuit brought by FanDuel co-founder Nigel Eccles and other plaintiffs on Friday (22 November).
The decision will enable the lawsuit, which focuses on the fallout of the 2018 FanDuel and Paddy Power Betfair merger, to move forward after years of delays.
The lawsuit, filed in 2020, includes more than 100 plaintiffs including the FanDuel founders, early employees, and investors.
The plaintiffs allege that the defendants, comprising various institutional shareholders and executives, deliberately undervalued FanDuel during the merger to benefit preferred shareholders, which resulted in ordinary shareholders receiving nothing from the deal.
In court filings, the plaintiffs accused the defendants’ recently tabled motion to dismiss of being a ploy to delay discovery.
The plaintiffs’ attorneys said earlier in the month: “Because further discovery in this case is inevitable, staying it now accomplishes nothing and, indeed, may serve to complicate discovery in the future due to the passage of time.
“The only purpose staying discovery serves is to further delay this matter and reward defendants’ repeated efforts to avoid answering for their actions — actions that left FanDuel’s common shareholders without billions of dollars in value they had created.”
It follows the plaintiffs detailing new fraud, bribery and conspiracy allegations in a new 216-page amended complaint submitted this summer.
This included allegations that various people close to the business had conspired to squeeze the common shareholders out of the proceeds of the deal in violation of their fiduciary duty.
The defendants fired back in a September motion to dismiss, in which they argued this could not have been the case since they held many more ordinary shares than the plaintiffs.
The case, which had been previously dismissed, was revived in May after the New York Appeals Court ruled that legitimate breach of contract claims had been raised.