Lawyers step up claim
Harper Macleod advising FanDuel founders in $120m legal fight
Legal battle: Nigel and Lesley Eccles (pic: Terry Murden)
Legal firm Harper Macleod is advising four founders of fantasy sports business FanDuel in a $120 million battle with the company’s new owners.
Nigel Eccles and Lesley Eccles, Tom Griffiths and Rob Jones established the company in Edinburgh in 2009 but saw their shareholdings wiped out when its private equity backers last year sold the company to Paddy Power Betfair, now known as Flutter Entertainment.
They lodged a petition at the Court of Session in Edinburgh last August claiming that FanDuel’s $465m merger with gambling giant Paddy Power Betfair significantly undervalued the business.
None of original shareholders received a payout while the new CEO Matt King and the rest of the executive team shared a $30.3 million pay-off. Preferential shareholders in the deal, announced in May 2018, were to be paid first.
But because the sale price fell short of the enterprise value of $559m owed to preference shareholders it left no money for ordinary shareholders.
The petitioners argue the value should have drastically increased in the wake of a US Supreme Court decision that ended the prohibition on sports wagering outside of Nevada.
By the time the sale was announced all four founders had left the business which is now headquartered in New York, with two substantial offices in Edinburgh and Glasgow.