Delaware Trial Begins
Trial starts in Delaware today, with eBay claiming craigslist’s directors acted inappropriately in implementing governance measures designed to protect the long term mission and values of craigslist.
The public version of craigslist’s pre-trial brief (PDF) is available, and Alexandria Sage has written a pre-trial “curtain raiser” for Reuters.
Separately, craigslist has filed suit in California charging eBay with unlawful and unfair competition, misappropriation of proprietary information, business interference, false advertising, phishing attacks, and breaches of fiduciary duty. This suit will proceed after the Delaware trial, but will probably not be presented to the jury until late 2011.
Delaware testimony will encompass eBay’s 2004 purchase of craigslist stock from a former shareholder. craigslist is a private company that does not publish its financial information, and eBay and craigslist both agreed that the terms of this transaction should not be made public. However, these details will now likely be subject of testimony at trial.
As a condition for its 2004 stock purchase from a former shareholder, eBay insisted on acquiring special rights over Craig’s and Jim’s shares (e.g. rights-of-first-refusal over any sale of their shares), and special rights from craigslist (e.g. veto rights over mergers and acquisitions), for which it collectively paid $16 million. This sum was distributed to craigslist’s shareholders, in part because had it not been distributed, eBay would have had a pro rata claim on any portion retained by the company, effectively paying itself for the rights it purchased. eBay’s special rights terminated in 2007, when it launched Kijiji in the US.
Also subject to testimony will be eBay’s misconduct, and abuses by eBay of its position as a shareholder of craigslist - evidence of and suspicions regarding which informed the craigslist board when the corporate governance protections in question were researched, deliberated upon, and ultimately adopted.
For additional information, please refer to craigslist’s pre-trial brief.
December 21st, 2009 at 4:57 pm
You know, this litigious crap society is just imploding. No friggin respect. Good luck CL I am rooting for you.
January 14th, 2010 at 7:37 pm
You GO Craigslst, kick there ass!!!
January 19th, 2010 at 1:43 am
Great wordsmithing, eloquently explained, and an IRAC to you.
A semi homeless man who was an eagle beagle helped me for some time as a landlord out of the movies was suing me for $640,000 dollars and giving me ongoing 3 day eviction notices that were full of bull, and caused a great turnover in his the legal firms working for my landlord.
At that time he lived in the small motor home and used his legal expertise to get by.
He told me IRAC and though my memory seems shot, for some reason that sticks, as all the details of the various cases in three courts fade away.
IRAC, Issue, Rule of Law, Application of the Rule of Law, and Conclusion.
Simple to say, and he could make magic with it in short order.
Don’t knew to wish you all luck as you, Jim and Craigslist are in the right.
I do wish you a democratic/fair and objective judge and/or jury at your trial.
January 26th, 2010 at 7:01 pm
Does anyone, anywhere know of a source of information where the status and events of this trial can be seen and followed? I’ve searched on & off for the past month and cant find a single word anywhere since (bleh) whitman & odyimar testified back in mid December 2009. You’d think people would be interested in this most putridly greedy attack by monstorous corporate ebay scum upon one of the absolute greatest websites that has ever existed in the eyes of many millions of people. Thanks.
O yeah, save CA! register to vote for anybody EXCEPT whitman!
February 5th, 2010 at 2:05 pm
I smell a book and movie coming soon, this is great drama. I hope it plays out to your benefit. Fight the good fight!
March 12th, 2010 at 5:36 am
I smell a book and movie coming soon, this is great drama. I hope it plays out to your benefit. Fight the good fight!
March 29th, 2010 at 3:17 pm
You know, this litigious crap society is just imploding. No friggin respect. Good luck CL I am rooting for you.
March 31st, 2010 at 4:45 pm
Dear Jim and Craig,
Craigslist comes to mind, when we try to update our web site:
http://www.postscience.com
Craigslist and Google should be rated the two most important companies in the world because they represent centers of information. Ebay apparently realizes the same conclusion when it tries to establish Kijiji, an obvious direct copying of Craigslist.
From my experience in turning Homefinders Bulletin in the late 1970s from negative cash flow into the first financially successful computerized information company, I wrote the report “The Computer Newspaper.”
For all its financial success, Google has only replaced the display ads of the newspaper. Craigslist ran Homefinders Bulletin in Berkeley out of business in 2004 with its more efficient and lower (zero) cost information system. Craigslist is replacing the classified section of the newspaper. Ebay controls the Auction Section, which is one of the least interesting sections of the classified section of the traditional newspaper. Now Ebay is trying to become a contender for the Computer Newspaper.
Being the center of information, the Computer Newspaper is a necessary international monopoly. Which company will win the ultimate prize: Google or Craigslist? Whether they are aware of it or not, they are competing for the ultimate prize: The Computer Newspaper. The display ad section of the newspaper only represents 10 to 20% of the total newspaper revenue, while the classified section, 60%. With just the rental section, Homefinders Bulletin ran the 30-years-old local newspaper, the Berkeley Gazette, out of business.
Google is a cash cow. It has a huge cash reserve and can expand into the classified section without any financial limitation. Craigslist has the price advantage (backed by its efficient technical people) because it charges nothing. In sum, Google has the cash advantage, and Craigslist has the price advantage. Google is superior in technology, and Graigslist is ahead in theory.
My business plan of “The Computer Newspaper” is gradually becoming obsolete as Internet companies have turned the proposed plan into reality, particularly, Graigslist working on the classified ad section, Google on the display ad section through an index search service, Yahoo on the news, eBay on the auction section of classified ad, etc. Yet, few, if any, companies realize the full potential of, and the significance of the competition for, the globally monopolistic Computer Newspaper.
Post-Science Institute is impartial to the competition (slightly leaning toward Craigslist), but would definitely continue to be an very interested observer.
I wish you good luck.
With best regards,
Hugh
http://www.postscience.com
PS: I have recently replied to an email from Craig long ago, inviting Craig and you to meet with Richard Stallman and me, if time permit, in May.