A wood-pellet fuel businessman from upstate New York has filed suit against social media juggernaut Facebook and founder and CEO Mark Zuckerberg, claiming that he is the majority owner of the company.
In the lawsuit, which was filed in state court in New York's Allegany County on June 30, Paul D. Ceglia claims that he and Zuckerberg signed a contract on April 28, 2003 entitling him to 50 percent of the company in exchange for $1,000. He also claims that the contract promised him an additional 1 percent share for every day after the Jan. 1, 2004 deadline until the site was finished. Since, according to Ceglia's lawsuit, the site was finished on Feb. 4, 2004, he would be entitled to an 84 percent stake in the company under the 2003 contract.
Although attorneys for Facebook and Zuckerberg describe the lawsuit as "completely frivolous," acting New York State Supreme Court Justice Thomas P. Brown signed an order freezing Facebook's assets. Facebook transferred the case to federal court in Buffalo, N.Y. and is seeking to have the order annulled. The company argues that the suit is "almost certainly barred" by the six-year statute of limitations for contract lawsuits in New York, given that the alleged breach of contract occurred in 2003. Facebook spokesperson Barry Schnitt says the company intends to fight the suit "vigorously."