Investors in FanDuel are facing a lawsuit in New York concerning the company's valuation before a merger.

An investor in Flutter Entertainment, previously known as Paddy Power Betfair, is being sued in New York by the founders of FanDuel and other former employees over the company's valuation during a 2018 merger. The New York Court of Appeals has allowed the lawsuit to proceed, overturning a previous dismissal by a lower court in Scotland. This lawsuit, filed by the founders of FanDuel and over 100 other individuals, initially targeted Shamrock Capital Advisors, which owned more than a 14% stake in FanDuel, in 2018.

From Next.io:

The plaintiffs argued they lost out on $120m when FanDuel was acquired by Paddy Power Betfair in the aftermath of the US Supreme Court’s 2018 PASPA repeal.

This verdict paved the way for the state-by-state legalisation of sports betting, with FanDuel subsequently becoming the number one operator nationwide by market share.

Yesterday the court ruled the suit, which was initially filed in Scotland, could proceed as legitimate breach of contract claims were raised.

The court said: “The Appellate Division correctly concluded that Scots law applies to plaintiffs’ claims and appropriately took judicial notice of its content in resolving defendants’ motion to dismiss.

“We conclude, however, that plaintiffs have sufficiently pleaded causes of action for breach of fiduciary duty under Scots law. Accordingly, we reverse the Appellate Division order.”

It comes following a 2022 decision by a five-judge panel in New York Appellate court that dismissed the case, arguing the FanDuel founders had failed to make a valid claim under Scottish law.
Read more here: https://next.io/news/new-york-court-...nders-lawsuit/