The former chief executive of Intermix Media is suing the company and venture capital firm VantagePoint Venture Partners over Intermix’s sale last year to News Corp.
Such lawsuits are becoming frequent, as we mentioned a couple of weeks ago, when we wrote about the recent Wine.com suit. For that story, we talked with people who said there are reasons entrepreneurs and employees are standing up and making claims like this (for one, the VC community is less of a clique than it was, and you aren’t shooting yourself in the foot by taking them on).
We haven’t talked with either side about the suit, so won’t say anything about merit.
But this is now like getting rear-ended by someone in your car. Whether you are really hurt, or you fake it, you now have a reason to make a fuss, file suit to claim damages, and can usually get something because companies have earmarked some money to pay you off; for them, it is the cost of doing business. The more we report about these tech lawsuits, the more we’re finding that VC firms have earmarked a little stash of cash to pay people off in these cases (an escrow account is set up at the time of the acquisition or sale of the company).
In his complaint, former CEO Brad Greenspan charges Intermix directors sought personal gains and failed to act in the shareholders’ best interests. “News Corp. functioned as the ‘escape hatch’ for a band of individuals, including [those at] VantagePoint, which had effectively picked the pocket of Intermix shareholders in a series of self-serving transactions,” Greenspan said in a statement to VentureWire (reg required), where we first saw the story.
By the way, the legal wrangling down there isn’t new:
The complaint, filed in Los Angeles County Superior Court, amends an earlier lawsuit filed in August by Greenspan, who had another lawsuit against Intermix dismissed last year. The case is running parallel to legal action from other former Intermix shareholders about the price paid by News Corp.