{"id":112354,"date":"2019-08-15T15:18:20","date_gmt":"2019-08-15T22:18:20","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=112354"},"modified":"2019-08-16T12:28:33","modified_gmt":"2019-08-16T19:28:33","slug":"fanduel-founders-renew-lawsuit-against-flutter-entertainment","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/","title":{"rendered":"FanDuel Founders Renew $120 Million Lawsuit Against Flutter Entertainment"},"content":{"rendered":"

Former CEO of FanDuel Nigel Eccles and three of its other co-founders are about to renew legal action<\/a> against their former company after its $465 million buyout in 2018 by Flutter Entertainment didn\u2019t yield them a bean.<\/p>\n

\"Nigel
Brit Nigel Eccles is widely credited with inventing the DFS model. But he and his FanDuel cofounders believe the company was sold too cheaply to Flutter Entertainment, a transaction that paid them nothing personally. (Belfast Telegraph)<\/figcaption><\/figure>\n

The founders initially filed suit against FanDuel last year in a court in Edinburgh, Scotland, where the company was founded, although that case was withdrawn for reasons that are not clear.<\/p>\n

But current FanDuel CEO Matt King said in newly filed company accounts that he understood that a new lawsuit would be launched shortly by the plaintiffs through a new legal counsel.<\/p>\n

Flutter, until recently known as Paddy Power Betfair, acquired FanDuel and merged it with its existing US operations in the wake of the US Supreme Court\u2019s rejection of the federal ban on sports betting, as it prepared to assail the suddenly liberalized US markets.<\/p>\n

Preferential Shareholders Cash Out<\/strong><\/h2>\n

As ordinary shareholders, Eccles, his wife Lesley Eccles, and fellow plaintiffs Tom Griffiths and Rob Jones received nothing from the transaction. But the preferential shareholders — largely US private equity companies that had invested in FanDuel and financed growth, such as KKR and Shamrock Capital — profited handsomely.<\/p>\n

Eccles stepped down from the board<\/a> in November 2017, shortly after a proposed \u201cmerger of equals\u201d between FanDuel and DraftKings was nixed by the FTC due to antitrust concerns.<\/p>\n

\n

Eccles spent the previous two years fighting battles with US authorities over the legality of daily fantasy sports. In an interview with Daily Business<\/em>, he described the experience as \u201cpretty hellish,\u201d although now that those battles were over, he felt he could move on to pursue new ventures, he said.<\/p>\n<\/div>\n

Eccles launched esports social media platform Flick, while Leslie Eccles, who left FanDuel a month before her husband, built an app called Relish, described as a \u201cpersonal trainer for relationships.\u201d<\/p>\n

But the Eccles\u2019 departures left no one on the board to represent ordinary shareholders. The deal was engineered — perfectly legally — in a waterfall financial structure, so that preferential shareholders were paid first, leaving nothing for the minority shareholders, who not only founded FanDuel, but the DFS concept itself.<\/p>\n

Valuation Off By $120 Million <\/strong><\/h2>\n

But the plaintiffs believe the board messed up and should have demanded much more from Flutter for FanDuel, which would have allowed the ordinary shareholders to get paid.<\/p>\n

They are seeking $120 million from Flutter Entertainment.<\/p>\n

The $465 million valuation of FanDuel was made prior to SCOTUS rejection of the sports betting ban. But the sale went through after the court had delivered its judgment, which means it should have increased dramatically, the plaintiffs have argued.<\/p>\n

Both DraftKings and FanDuel are clear leaders in the New Jersey sports betting market, the only ones in the US to have full-scale mobile wagering, largely thanks to existing brand recognition and pre-existing player databases from their DFS market dominance.<\/p>\n

\u201cHaving elected to so utilize the \u2018waterfall\u2019 provisions, the board was then required to pick a price on which to base the conversion,\u201d read the original filing. \u201cThe board of FanDuel considered whether the US Supreme Court ruling and its impact upon the market value of FanDuel should cause the company to be revalued. It has chosen not to do so.<\/p>\n

The board of FanDuel elected to use the valuation obtained prior to the US Supreme Court ruling, without seeking any current and sound valuation of the company,\u201d it continued.<\/p><\/blockquote>\n

\u201cThe decision of the board (whose interests are aligned with preference shareholders) not to seek and act upon a new market valuation in the face of a material event, which is likely to have significantly increased the market valuation of FanDuel, is a breach of its fiduciary duties,\u201d it added.<\/p>\n

King said that it was \u201cpossible\u201d that the case would be successful. But since the company did not consider it \u201cprobable,\u201d no accrual had been recorded in the balance sheet.<\/p>\n","protected":false},"excerpt":{"rendered":"

Former CEO of FanDuel Nigel Eccles and three of its other co-founders are about to renew legal action against their former company after its $465 million buyout in 2018 by Flutter Entertainment didn\u2019t yield them a bean. The founders initially filed suit against FanDuel last year in a court in Edinburgh, Scotland, where the company […]<\/p>\n","protected":false},"author":36,"featured_media":112355,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14007,1074],"tags":[],"acf":[],"yoast_head":"\nFanDuel Founders Renew Lawsuit Against Flutter Entertainment<\/title>\n<meta name=\"description\" content=\"FanDuel founders Nigel Eccles, Lesley Eccles, Tom Griffiths and Rob Jones to refile lawsuit against Flutter Entertainment and FanDuel.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FanDuel Founders Renew Lawsuit Against Flutter Entertainment\" \/>\n<meta property=\"og:description\" content=\"FanDuel founders Nigel Eccles, Lesley Eccles, Tom Griffiths and Rob Jones to refile lawsuit against Flutter Entertainment and FanDuel.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2019-08-15T22:18:20+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-08-16T19:28:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/08\/Nige.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"673\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Philip Conneller\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@casinoorgphilc\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Philip Conneller\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/\",\"url\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/\",\"name\":\"FanDuel Founders Renew Lawsuit Against Flutter Entertainment\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/08\/Nige.jpg\",\"datePublished\":\"2019-08-15T22:18:20+00:00\",\"dateModified\":\"2019-08-16T19:28:33+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/58769b72851c8cf117fb58ca150ebf8b\"},\"description\":\"FanDuel founders Nigel Eccles, Lesley Eccles, Tom Griffiths and Rob Jones to refile lawsuit against Flutter Entertainment and FanDuel.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/fanduel-founders-renew-lawsuit-against-flutter-entertainment\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/08\/Nige.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2019\/08\/Nige.jpg\",\"width\":1200,\"height\":673,\"caption\":\"Brit Nigel Eccles is widely credited with inventing the DFS model, but he and his FanDuel cofounders believe the company was sold too cheaply to Flutter Entertainment, a transaction that personally paid them nothing. 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