The co-founders of dating app Tinder on Tuesday filed a lawsuit against its parent companies, alleging that the firms undermined the app’s valuation in order to deny them stock options worth billions of dollars, reported CNN. The complainants include eight other former and current executives of the app.
Tinder founders Sean Rad, Justin Mateen, and Jonathan Badeen filed the suit in New York State Supreme Court, seeking at least $2 billion (around Rs 14,000 crore) in damages from IAC/InterActiveCorp and its subsidiary Match Group, the two companies that own Tinder. Tinder’s valuation in 2017 was set at $3 billion (around Rs 21,000 crore), according to CNN.
The complainants allege that IAC and Match consistently falsified financial information to lower the app’s valuation, which prevented bigger payouts to the co-founders and executives. “Under the contracts between IAC/Match and the employees, the more valuable Tinder becomes, the more IAC/Match is required to pay,” says the lawsuit.
In an interview with CNN, Rad said the two companies lied about the financial performance. “They manipulated financial data, and essentially stole billions of dollars by not paying us what they contractually owe us,” he said. “We’re here to preserve our rights and to fight for what’s right, for what was promised to us.”
In a statement, the IAC described the allegations as devoid of any merit, saying they paid the app’s founders and employees more than billions of dollars in equity compensation, reported the Los Angeles Times. The statement further says that the valuation process was impeccably conducted and was overseen independently by two investment banks.
“Mr. Rad [who was dismissed from the company a year ago] and Mr. Mateen [who has not been with the company in years] may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make,” the statement said.
In a separate allegation, the lawsuit claimed that IAC executive and former Tinder CEO Gregg Blatt groped and sexually harassed an executive at a holiday party in 2016, reported Fortune. The executive in question was Tinder Vice President of Marketing and Communications Rosette Pambakian, who is one of the complainants in the lawsuit. It says that the two companies decided to cover up the incident as Blatt was leading the scheme to cheat employees of compensation. “Because a credible investigation – let alone a firing in public view – would have derailed their scheme, Defendants whitewashed Blatt’s misconduct,” said the lawsuit.
The IAC statement did not comment on the allegations of sexual harassment, reported CNN.