Tinder founders sue parent companies Match and IAC for at least $2B

A group of Tinder founders and executives has filed a lawsuit
against parent company Match Group and its controlling shareholder IAC.

The plaintiffs in the suit include Tinder co-founders Sean Rad,
Justin Mateen and Jonathan Badeen — Badeen still works at Tinder, as do
plaintiffs James Kim (the company’s vice president of finance) and
Rosette Pambakian (its vice president of marketing and communications).

We’ve reached out to IAC for comment, as well as Pambakian, who’s
served as our main contact at Tinder. We’ll update the post if we hear
back.

The suit alleges that IAC and Match Group manipulated financial data
in order to create “a fake lowball valuation” (to quote the plaintiffs’
press release), then stripped Rad, Mateen, Badeen and others of their
stock options. It points to the removal of Rad as CEO, as well as other
management changes, as moves designed “to allow Defendants to control
the valuation of Tinder and deprive Tinder optionholders of their right
to participate in the company’s future success.”

The lawsuit also alleges that Greg Blatt, the Match CEO who became
CEO of Tinder, groped and sexually harassed Pambakian at the company’s
2016 holiday party, supposedly leading the company to “whitewash” his
actions long enough for him to complete the valuation of Tinder and its
merger with Match Group, and then to announce his departure.

In response, the plaintiffs are asking for “compensatory damages in
an amount to be determined at trial, but not less than $2,000,000,000.”

“We were always concerned about IAC’s reputation for ignoring their
contractual commitments and acting like the rules don’t apply to them,”
Rad said in the release. “But we never imagined the lengths they would
go to cheat all the people who built Tinder. The Tinder team —
especially the plaintiffs who are currently senior leaders at the
company — have shown tremendous strength in exposing IAC/Match’s
systematic violation of employees’ rights.”

Update: We’ve just received the following joint statement from IAC and Match Group.

The allegations in the complaint are meritless, and IAC and Match Group intend to vigorously defend against them.

Since Tinder’s inception, Match Group has paid out in excess of a
billion dollars in equity compensation to Tinder’s founders and
employees. With respect to the matters alleged in the complaint, the
facts are simple: Match Group and the plaintiffs went through a
rigorous, contractually – defined valuation process involving two
independent global investment banks, and Mr. Rad and his merry band of
plaintiffs did not like the outcome. 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. Mr. Rad has a rich history of outlandish public
statements, and this lawsuit contains just another series of them. We
look forward to defending our position in court.