NPR reported Tuesday that the co-founders of Tinder and eight other executives are suing the dating app’s current owners for more than $2 billion for allegedly swindling the plaintiffs out of money they believe they were owed.
Tinder’s co-founders, Sean Rad, Justin Mateen, and Jonathan Badeen, are suing InterActiveCorp (IAC) and its subsidiary Match Group for $2 billion in damages.
According to the lawsuit, IAC and Match Group “stifled the value of the stock options held by early employees as part of agreements signed in 2014, exaggerating expenses, downplaying growth and delaying the launch of features to cook up a pessimistic projection of Tinder’s fortunes,” after which IAC merged with Tinder and Match Group in effort to prevent shareholders from profiting off of the app’s potential future growth.
The plaintiffs claim that they are owed at least 20 percent of the app’s value, which is currently estimated to be around $3 billion, although Tinder’s value prior to IAC’s buy out was closer to $10 billion.
In addition to these damages, the suit also alleges that Match’s CEO Greg Blatt “groped and sexually harassed” Tinder’s vice president of marketing and communications, Rosette Pambakian, at an office holiday party in December 2016. Pambakian is also one of the eight other plaintiffs in the lawsuit.
Rad, who was replaced as chief executive of Tinder by Platt the very same month, stated, “Because a credible investigation — let alone a firing in public view — would have derailed their scheme, Defendants whitewashed Blatt’s misconduct. Defendants kept Blatt in place as Tinder’s ‘interim’ CEO long enough to complete the private valuation and secret merger of Tinder.”
“But just two weeks after their scheme concluded,” Rad continued, “Defendants publicly announced Blatt’s ‘retirement’ — rewarding him with a lucrative golden parachute and a glowing farewell message from [IAC Chairman Barry] Diller praising Blatt’s ‘integrity.'”
IAC, however, has since called the allegations “meritless,” insisting that Match and Tinder played everything by the book and adhered to a contract with investment banks, and asserting that the lawsuit was only filed because “Mr. Rad and his merry band of plaintiffs did not like the outcome,” adding that he also “has a rich history of outlandish public statements, and this lawsuit contains just another series of them.”
Rad issued a brief statement on Tuesday, claiming, “We were always concerned about IAC’s reputation for ignoring their contractual commitments and acting like the rules don’t apply to them.”
“But,” he continued, “we never imagined the lengths they would go to cheat all the people who built Tinder.”